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PRECIOUS-Gold firms but stays on track for first weekly loss in three

Published 2019-02-08, 07:38 a/m
Updated 2019-02-08, 07:38 a/m
© Reuters.  PRECIOUS-Gold firms but stays on track for first weekly loss in three

* Spot gold down 0.4 pct so far this week

* SPDR Gold holdings down 1 pct for the week

* Gold in euros climbs to highest since May 2017

* EU slashes euro zone growth outlook

By K. Sathya Narayanan

Feb 8 (Reuters) - Gold firmed on Friday, holding above the key $1,300 level on concerns over economic growth in Europe and elsewhere, but headed for its first weekly loss in three as the dollar strengthened against the euro.

Spot gold XAU= was up 0.2 percent at $1,312.67 per ounce at 1237 GMT, after hitting its lowest since Jan. 29 at $1,302.11 on Thursday. U.S. gold futures GCv1 were also up 0.2 percent at $1,316.30.

However, while bullion has risen about 13 percent since touching over 1-1/2-year lows in August, mostly due to volatile stock markets and a dovish U.S. Federal Reserve, a strong dollar has driven gold down about 0.4 percent so far this week.

Data pointing to an economic slowdown in Europe has weighed on the euro. The resulting dollar strength has pressured gold even as economic concerns supported interest in the metal as a haven from risk. FRX/

"The major headwind is the pretty resilient dollar at the moment," said Philip Newman, director at Metals Focus.

"There are quite a few concerns - economically, financially and politically - and yesterday, there was a downgrade in (the) European growth (forecast)."

The dollar index .DXY , which tracks the greenback against major currencies, was on course for its first weekly gain in three and was trading close to a two-week high. USD/

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Against the euro EUR= , the dollar was set for its biggest weekly rise in four months. Gold denominated in euros XAUEUR=R hit its highest since May 2017, at 1,157.80 euros per ounce.

On Thursday, the European Commission cut its forecasts for euro zone economic growth this year and next, citing global trade tensions and China's slowdown as the main drags on the European Union's economy. about a global slowdown and the lack of any sign of a resolution to the U.S.-China trade row dragged global shares down for a third day. MKTS/GLOB

Meanwhile, holdings in the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD , have fallen over 1 percent for the week in what could be their worst fall since the week ended Oct. 7. GOL/ETF

"We see no reason for the outflows in view of the falling stock markets and declining bond yields, however. We believe gold should be in good demand as an attractive alternative investment and a safe haven, partly because there are after all numerous political risks," Commerzbank (DE:CBKG) said in a note.

Among other precious metals, palladium XPD= rose 0.9 percent to $1,398 an ounce.

Spot silver XAG= gained 0.2 percent to $15.74, while platinum XPT= inched down 0.1 percent to $794.89 per ounce.

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