* Prices pressured by dollar; upbeat PMI data boosts
currency
* Gold on course for weekly loss, snapping two weeks of
gains
By Josephine Mason and Mariana Ionova
NEW YORK/LONDON, Oct 23 (Reuters) - Gold was flat to
slightly lower on Friday as the dollar soared to its highest
level in more than two months and U.S. equities raced higher
after China eased monetary policy for the sixth time in a year,
reviving expectations of a U.S. rate hike.
Bullion vaulted over 1 percent higher to an intraday high of
$1,180 per ounce in early New York trading immediately after
Beijing announced a surprise interest rate cut.
Investors initially bet the Federal Reserve would be
compelled to delay raising rates given the fragility of the
global economy, but buying soon evaporated on the view that the
Chinese stimulus and upbeat U.S. data made a U.S. rate hike more
likely this year.
Gains in U.S. equities also reduced the appeal of safe-haven
bullion and bonds, while the U.S. dollar rose to its highest
mark since Aug. 19 against a basket of currencies, further
pressuring bullion. .DXY . MKTS/GLOB
"The effect of the Chinese rate cut faded with breathtaking
alacrity," said Tai Wong, director of base and precious metals
trading for BMO Capital Markets in New York.
"The surge in U.S. shares and yields backing up as a result
weighed on metals and once gold slipped back below $1,170, day
traders liquidated and we didn't find decent support until
$1,160."
Spot gold XAU= eased 0.03 percent to $1,166.3 an ounce at
3:05 p.m. EDT (1905 GMT). U.S. gold futures GCcv1 settled down
0.3 percent at $1,162.8. Bullion was on course for a weekly
loss, snapping two weeks of gains.
Gold has languished at 5-1/2-year lows in recent months on
expectations the Fed will raise rates this year, potentially
lifting the opportunity cost of holding non-yielding bullion.
Concerns over the health of the global economy have recently
pushed back expectations into 2016. But further stimulus in
China and upbeat U.S. data have increased the likelihood of a
rate rise in December.
Better-than-expected manufacturing figures for October
supported the dollar. U.S. flash manufacturing PMI rose to its
highest level since March, beating expectations for a slight
decline from the previous month. USMPMP=ECI
A stronger dollar weighs on gold by making the metal more
expensive for holders of other currencies.
Friday's slide deepened losses from the previous session,
when gold fell to its weakest point since Oct. 13. The metal was
on course to lose 1.2 percent this week, snapping two weeks of
gains.
Silver XAG= was up 0.32 percent at $15.90 an ounce,
platinum XPT= dipped 0.85 percent to $1,007.20 per ounce and
palladium XPD= gained 1.4 percent to $695.25 per ounce.
(Editing by David Clarke, David Evans and Paul Simao)