* Dollar, equities recover after sharp decline
* PBOC says no basis for further yuan depreciation
* Coming up: U.S. retail sales at 1230 GMT
* GRAPHIC-2015 asset returns-http://link.reuters.com/dub25t
(Updates throughout, changes dateline, pvs MANILA)
By Jan Harvey
LONDON, Aug 13 (Reuters) - Gold fell on Thursday, snapping
five sessions of gains, as concerns over further losses in the
yuan after China devalued the currency this week eased, allowing
stock markets and the dollar to rebound.
Falling equities, dollar strength and speculation that the
weaker yuan could delay a U.S. interest rate rise sparked a
short-covering rally in gold this week after its recent drop to
5-1/2 year lows, pushing prices to their highest since mid-July.
Spot gold XAU= was down 0.7 percent at $1,117.26 an ounce
at 0942 GMT, while U.S. gold futures GCv1 for December
delivery were down $6.70 an ounce at $1,116.90. Spot prices
earlier reached a three-week high of $1,126.31, 4.5 percent
above last month's low.
"Many people had short positions in the gold market -- it
was a crowded trade," LBBW analyst Thorsten Proettel said.
"In the last few days we've seen a short squeeze, but this
isn't the end of the pressure on the gold price. We still have
interest rate hike positivity in the United States, and that
will pressure gold prices in the future."
The dollar index rose 0.3 percent .DXY on Thursday, after
falling in the previous session on doubts over whether the
Federal Reserve will raise rates in September given the
devaluation of the yuan.
Investors had been betting the Fed could raise rates at its
next policy meeting, a move seen as negative for gold, as it
would lift the opportunity cost of holding non-yielding bullion
while boosting the dollar.
China's yuan fell for a third day on Thursday but the
People's Bank of China said there is no basis for further
depreciation in the currency. European shares rallied on
Thursday after the comments.
"Verbal intervention by the PBoC on (the yuan) has given
markets a better risk tone today," RBC Capital Markets said in a
note.
Gold demand hit a six-year low in the second quarter, a
World Gold Council report showed, as sluggish prices and the
prospect of better returns in equities curbed interest in the
metal.
SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund, said its holdings rose 0.6 percent to 21.6
million ounces on Wednesday, the first increase in days after
falling to the lowest since September 2008. GOL/ETF
Spot palladium XPD= was down 1.1 percent at $615.90 an
ounce after hitting a two-week high of $627 earlier. Platinum
XPT= was down 0.5 percent at $991.70 an ounce and silver
XAG= fell 0.8 percent to $15.36 per ounce.