PRECIOUS-Gold set for weekly loss as U.S. data, dollar weigh

(Adds comment, updates prices)
* Spot gold may test support at $1,488 per ounce/oz
* Dollar at more than three-week high

By Diptendu Lahiri
Sept 27 (Reuters) - Gold prices fell on Friday and was on
track for its third weekly fall for the month, restrained as a
slew of U.S. economic data beat expectations and the dollar held
near multi-week highs against major currencies.
Spot gold XAU fell 0.4% to $1,499.22 per ounce at 0744
GMT, declining 1% for the week after a near 2% gain last week.
U.S. gold futures GCv1 were down 0.6% lower at $1,506.01
per ounce.
"A bunch of U.S. economic data came way above the forecasts,
like the new home sales data and that along with a strong dollar
is weighing on gold right now," said Jigar Trivedi, a
commodities analyst at Mumbai-based Anand Rathi Shares & Stock
Brokers.
The National Association of Realtors' pending home sales
index rose 1.6% to a reading of 107.3 for August, the
association said on Thursday, while economists polled by Reuters
had forecast an increase of 0.9%.
The greenback held near multi-week highs against major
currencies as heightened risks from political tensions to the
Sino-U.S. trade war increased its safe-haven appeal.
A whistle-blower report released on Thursday said U.S.
President Donald Trump not only abused his office in attempting
to solicit Ukraine's interference in the 2020 U.S. election for
his political benefit, but that the White House tried to "lock
down" evidence about that conduct. This added to the uncertainties around the global growth
outlook amid a prolonged U.S.-China trade spat.
European shares also rose on Friday, with London stocks
outperforming due to a weaker pound, while hopes of a quick
resolution to the U.S.-China trade war offset worries of slowing
economic growth and rising political risks.
However, investors were cautious on mixed signals from China
and the United States on their tariff dispute, which has helped
the bullion gain about 17% so far this year.
A number of central banks across the globe, like the Fed,
the European Central Bank and Bank of Japan, have cut interest
rates to stimulate the economy amid fear of a potential
recession.
"If the global economic situation does not improve, we may
see central banks around the world cutting down interest rates,"
said Margaret Yang Yan, a market analyst at CMC Markets.
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion and weigh on the dollar, making gold
cheaper for investors holding other currencies.
China's top diplomat said on Thursday Beijing was willing to
buy more U.S. products, and that talks would yield results if
both sides "take more enthusiastic measures" to show goodwill
and reduce "pessimistic language." But reports saying Washington is unlikely to allow American
firms to supply China's Huawei Technologies HWT.UL undermined
hopes of a complete deal between the countries.
Spot gold may test a support at $1,488 per ounce, a break
below which could cause a fall towards $1,446, according to
Wang Tao, a Reuters market analyst for commodities and energy
technicals.
Silver XAG= fell 1.34% to $17.56 per ounce, platinum
XPT= down 0.2%, at $928.34 per ounce and palladium XPD= fell
0.5% to $1,659.54 per ounce.