International gold heads for third week of losses

Gold extended gains on Friday as the euro rebounded against the dollar, but the precious metal was heading for its third straight week of losses as a brightening economic outlook in the United States prompted investors to park their money elsewhere. Although the US dollar took a breather after a rally, the uptrend was seen unbroken after the Federal Reserve offered no clues whether it plans to buy any more major assets to keep interest rates and borrowing costs low -- a move which would lift bullion's safe-haven appeal. Click here for Cloud Computing Also Read Related Stories News Now - Rupee posts heavy losses against dollar - Roiled by op-ed, Goldman loses $2.15 bn m-cap - Technical indicator suggests major upside for Nifty - Rupee loses 47 paise against dollar - Gold reverses 2-day fall, up by Rs 15 - Discourage gold imports to maintain BoP: Survey Gold fell to $1,655.04 an ounce in early trade before rebounding to $1,662.99 by 0222 GMT, up $5.26. The precious metal hit a low of $1,634.09 on Wednesday, its weakest since January 16, on fading expectations of more monetary easing in the United States. "There's little need for a safe haven at the moment," said Lynette Tan, an analyst with Phillip Futures in Singapore. "Going forward, we could see gold maintain at this level, or even fall to about $1,620. I think gold will be sidelined at the moment compared to the other risk assets." Bullion, which was heading for its longest losing streak since early October, struck a record of around $1,920 last September on fears the euro debt crisis could stall global growth. US April gold added $3.90 an ounce to $1,663.40 an ounce. The rally in the dollar took a bit of a breather on Friday as investors booked profits on recent gains, but dealers said the uptrend could resume after the latest US data showed further evidence supporting the view that the recovery in the world's biggest economy was becoming more self-sustaining. The pullback in the dollar saw the euro bounce off a one-month low of $1.3002 to $1.3079, with initial support seen at $1.3000, followed by the February 16 trough of $1.2973. US economic growth showed signs of becoming more self-sustaining as the number of Americans claiming new jobless benefits fell back to a four-year low last week and manufacturing activity in the Northeast picked up this month. In theory, a stronger dollar makes commodities priced in the US currency more expensive for holders of other currencies. "Gold still appears to be taking a hit and, if it is to escape the downward trend in the short term, it will have to overcome the price resistance at $1,726 per ounce," said Heraeus in a report. "Only then will it begin moving up again." Dealers awaited the release of the US CFTC commitment of traders weekly data at 1930 GMT, which reflects investors' sentiment on gold. Net long futures positions held by speculators fell 20% in the week up to March 6, the biggest drop since August 2010. Platinum was still at a premium to gold because of worries about supply for southern Africa. Platinum gained on worries about supply following a month-long stoppage at the world's second-largest producer Impala Platinum's largest facility, which the company said cost nearly 200,000 ounces in production and would probably cut deliveries in April by as much as half. Among equities, the Nikkei share average steadied on Friday after hitting an eight-month closing high the previous session, with investors pocketing gains in exporters after a strong rally, although robust US economic data provided support.