Gold Eyes Worst Week In Five As Strong U.S. Data Fuels Fed Hike View

Gold was stuck near recent lows on Friday and was on track to post its biggest weekly drop in five as strong U.S. economic data backed the case for a near-term increase in interest rates.

A looming U.S. rate hike has dimmed the appeal of non-interest bearing assets as gold, which may explain the fall in the metal from a recent seven-week high even as global equities tumbled on fears over a slowing Chinese economy.

The upward revision in U.S. economic growth in the second quarter to 3.7 percent from the initial estimate of 2.3 percent spurred market expectations that the Federal Reserve could still raise rates this year despite the market turmoil.

Spot gold was up 0.4 percent at $1,129.60 an ounce by 0226 GMT, but down almost 3 percent for the week.

The metal touched a one-week low of $1,117.35 on Wednesday and has lost more than 3 percent since hitting a seven-week top on Aug. 21

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