* Gold steadies after seven days of losses
* But still near 8-week low, eyes weekly dip
* Coming Up: U.S. non-farm payrolls, unemployment rate; 1330
GMT
(Updates prices)
By A. Ananthalakshmi
SINGAPORE, Nov 6 (Reuters) - Gold languished near an
eight-week low on Friday and was set to post its biggest weekly
drop since July as investors positioned themselves for a
possible U.S. rate hike this year, pulling money out of bullion
funds.
Market participants are now waiting for the U.S. non-farm
payrolls report due later in the day for indications on the
strength of the economy and how it would affect the Federal
Reserve's monetary policy.
Spot gold XAU= had ticked up 0.5 percent to $1,109.10 an
ounce by 0647 GMT, not far from $1,102.35 hit in the previous
session, the lowest since Sept. 11. The metal has lost 3 percent
for the week, the sharpest slide since the week ended July 24.
"Gold continues to trend lower with rising bets on a Fed
rate hike in December. The recent trend looks entrenched with
sentiment weakening in recent days," ANZ said in a note.
Assets in SPDR Gold Trust GLD , the top gold-backed
exchange-traded fund, tumbled to 671.77 tonnes, the lowest since
mid-August. On Thursday alone, the fund saw outflows of 8.34
tonnes, the biggest daily drop since July 17.
Fed Chair Janet Yellen said on Wednesday that a rise in
rates in December was a "live possibility" if justified by
upcoming economic data.
The Fed in its October policy statement was deliberately
trying to convince investors of a possible December interest
rate hike, and was successful in doing so, Atlanta Fed President
Dennis Lockhart said on Thursday.
Earlier, after the U.S. central bank's September meeting,
investors believed the Fed would delay the first U.S. rate hike
in nearly a decade to next year on global growth concerns.
Gold as a non-interest-paying asset could see demand take a
hit from higher rates.
Solid payrolls data later in the session could seal the case
for a December rate hike. According to a survey of economists,
non-farm payrolls probably increased by 180,000, well above the
139,000 jobs per month average for August and September.
"The $1,100 handle is the key figure on the downside whilst
a spike back above $1,110 could signal a technical turnaround or
at least a consolidation," said MKS Group trader James Gardiner.
Among other precious metals, silver XAG= and platinum
XPT= were headed for their third straight weekly decline.
With a 10-percent slide, palladium XPD= was on track for
its worst week since September 2011, hurt by sharp outflows from
exchange traded funds.
PRICES AT 0647 GMT
Metal Last Change Pct chg
Spot gold 1109.1 5.55 0.5
Spot silver 15.05 0.09 0.6
Spot platinum 954.8 8.81 0.93
Spot palladium 609.3 5.55 0.92
Comex gold 1108.4 4.2 0.38
Comex silver 15.03 0.047 0.31
COMEX gold and silver contracts show the
most active months