* Gold dips after 1.5 pct overnight gain
* But on track for weekly rise
* Prices propped up by softer dollar, equities
(Updates prices)
By A. Ananthalakshmi
SINGAPORE, April 8 (Reuters) - Gold eased from a two-week
high on Friday, giving back some of its sharp overnight gains,
but was set to post its strongest week in five on the Federal
Reserve's caution over raising U.S. interest rates and risk-off
sentiment in the market.
Most Asian shares fell to three-week lows on Friday, while
the yen retreated slightly from a 17-month high against the
dollar. MKTS/GLOB
Spot gold XAU= had eased 0.4 percent to $1,235.50 an ounce
by 0653 GMT on profit taking after its 1.5 percent gain
overnight. The metal had hit a two-week high of $1,243.50 in the
previous session.
For the week, the metal has gained 1.1 percent, its biggest
gain since the week ended March 4.
"Risk appetite waned with renewed concern over the power of
monetary policy. A weaker U.S. equity market lent support to
global volatility and put gold again at centrestage for
investors," ANZ analysts said in a note.
Bank shares led losses in Europe and the U.S. markets on
Thursday, amid talk of more lay-offs and cutbacks planned by
Europe's major lenders as they struggle with zero rates.
The dollar was hurt by a cautious Fed tone on interest rate
hikes. Minutes from the Fed's March policy meeting released on
Wednesday showed policymakers debated whether an interest rate
hike would be needed in April, although a consensus emerged that
risks from a global economic slowdown warranted a cautious
approach.
A slower pace in hiking rates would boost
non-interest-paying gold, while hurting the dollar.
Gold gained 16 percent in the first quarter of the year, its
best quarterly performance in nearly 30 years, on speculation
the Fed may delay hiking rates.
Markets were closely watching comments from Fed officials
for clues about the timing of any rate hikes.
The U.S. economy is on a solid course and still on track to
warrant further interest rate hikes, Fed Chair Janet Yellen said
on Thursday. San Francisco Fed President John Williams said at
least two interest-rate hikes this year is the "right course" so
long as the U.S. economy continues to grow, businesses add jobs,
and inflation picks up as he expects.
The Fed could stoke financial instability and set the stage
for a recession if it waits too long to raise interest rates
further, Kansas City Fed President Esther George said on
Thursday. AT 0653 GMT
Metal Last Change Pct chg
Spot gold 1235.5 -4.79 -0.39
Spot silver 15.204 -0.006 -0.04
Spot platinum 953.85 1.85 0.19
Spot palladium 536.65 3.65 0.68
Comex gold 1237.5 0 0
Comex silver 15.195 0.037 0.24
COMEX gold and silver contracts show the
most active months