* Gold up 16.5 pct in first quarter on safe-haven demand
* World stocks fall for first time in 4 days, lifting gold
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC
(Updates prices, adds comment)
By Jan Harvey
LONDON, March 31 (Reuters) - Gold rose 1 percent on Thursday
as the dollar and stock markets retreated, keeping the metal on
course for its biggest quarterly gain in nearly 30 years as
expectations of U.S. interest rate hikes receded.
The metal is highly exposed to rising rates, which lift the
opportunity cost of holding non-yielding assets, while boosting
the dollar. Gold fell 10 percent last year ahead of the first
U.S. rate increase in nearly a decade in December.
Spot gold XAU= was up 1 percent at $1,236.16 an ounce at
1330 GMT, while U.S. gold futures GCv1 for April delivery were
up $9.80 an ounce at $1,238.40.
World stocks fell for the first time in four days on
Thursday as a roller-coaster quarter drew to a close, while the
dollar slid to a five-month low against the euro. MKTS/GLOB
Gold, along with other markets, is now awaiting fresh
direction from U.S. non-farm payrolls data on Friday, a closely
watched barometer of the health of the U.S. economy. A soft
reading would bolster the view that rate hikes are not imminent.
"Investors are waiting to push gold higher, they just need
to have a good reason for it," ABN Amro analyst Georgette Boele
said.
"It could very well be the payrolls tomorrow. As they've
been at a very high level for quite a long time, if we get a
little bit of weakness, we have another reason (to rise)."
The metal rallied late on Tuesday after Federal Reserve
Chair Janet Yellen said the U.S. central bank should proceed
only cautiously in raising interest rates.
Gold's 16.5 percent climb in the first three months of this
year, its biggest quarterly rise since 1986, was also driven by
concerns over global growth, which battered equities and sparked
a wave of safe-haven buying.
"A combination of safe-haven demand on the back of worries
about China in particular, a scaling back of expectations of
further rate hikes from the Fed, and rising inflation
expectations ... have been behind the rally in the gold price,"
Capital Economics analyst Simona Gambarini said.
"Overall real interest rates will remain low, which is what
matters for gold."
Higher gold prices curbed demand for the precious metal in
Asia this week, with premiums in several major markets taking a
hit, traders in the top consuming region said.
Silver XAG= was up 1.7 percent at $15.43 an ounce, while
platinum XPT= was 2.1 percent higher at $976.24 an ounce and
palladium XPD= was up 1.9 percent at $572.42 an ounce.
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GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC
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