MANILA, Aug 28 (Reuters) - Gold wallowed near recent lows on
Friday and was on track to post its biggest weekly drop in five
as strong U.S. economic data backed the case for a near-term
increase in interest rates.
FUNDAMENTALS
* Spot gold XAU= was flat at $1,126.16 an ounce by 0043
GMT, and down 3 percent for the week. The metal touched a
one-week low of $1,117.35 on Wednesday and has lost nearly 4
percent since hitting a seven-week top on Aug. 21.
* U.S. gold for December delivery GCcv1 edged up 0.3
percent to $1,125.70 an ounce.
* The U.S. economy expanded at a 3.7 percent annual pace
instead of the 2.3 percent rate reported last month, the
Commerce Department said on Thursday in its second GDP estimate
for the April-June period.
* Economists say entering the current market turbulence with
strong momentum will help the U.S. economy shrug off the drag
from China's weakness. ID:nL1N1120QD
* The newest evidence of U.S. economic strength should put
the Federal Reserve on course to raise interest rates this year,
although some analysts say the first rate hike could happen in
December instead of September.
* U.S. weekly jobless claims remained below the 300,000
threshold for the 25th straight week, suggesting underlying
strength in the labor market.
* Concerns over a possible U.S. rate increase may have
sparked a global stock market rout rather than the devaluation
of China's yuan, said Yao Yudong, head of the bank's Research
Institute of Finance and Banking.
* Yao said the Fed should delay any rate hike to give
fragile emerging market economies time to prepare.
ID:nL4N11258D
* Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, stood at 21.95 million ounces
on Thursday, the highest in five weeks. GOL/ETF
* For the top stories on metals and other news, click
TOP/MTL or GOL
MARKET NEWS
* The dollar held at one-week highs against a basket of
major currencies, having benefited from upbeat U.S. data and as
investors continued to cut back on safe-havens such as the yen.
USD/
* Asian shares extended a global rally after upbeat U.S.
economic data calmed sentiment shaken by days of turmoil in
Chinese equities. MKTS/GLOB
DATA AHEAD (GMT)
0645 France Producer prices Jul
0900 Euro zone Business climate Aug
0900 Euro zone Consumer confidence final Aug
1200 Germany Consumer prices Aug
1230 U.S. Personal income Jul