NEW YORK/LONDON (Reuters) - Gold lost its early gains on Thursday, hovering just above the prior session's seven-week low as the U.S. was bolstered by hawkish comments from a Federal Reserve president.
A U.S. rate hike may come "fairly soon" if data confirm the economy is continuing to grow and labour markets are still tightening, said Federal Reserve Governor Jerome Powell, a permanent voter on the Fed's rate-setting committee.
Spot gold XAU= was down 0.3 percent at $1,220.16 an ounce by 2:27 p.m. EDT (1827 GMT). The metal had fallen to its lowest since April 6 at $1,217.25 on Wednesday. U.S. gold GCcv1 settled down 0.3 percent at $1,220.40 an ounce.
Earlier, the dollar had extended losses and gold prices firmed after data showed orders for long-lasting U.S. manufactured goods surged in April.
"Gold has entered a phase of consolidation due to stronger views that the U.S. Fed will raise rates this summer," said Carlo Alberto de Casa, chief analyst at ActivTrades.
The prospect of an interest rate increase, as indicated by U.S. Fed meeting minutes released last week, and a strengthening dollar have pushed gold down more than 5 percent so far in May, putting it on track for its biggest monthly decline since November.
Higher interest rates increase the opportunity cost of holding non-interest yielding gold.
"I still think everything's lacklustre," said Mariann Montagne, senior investment analyst at Gradient Investments, a Minnesota-based registered investment adviser.
"I'm pretty doubtful of the June increase and I'm more in the camp of (those expecting) the 25-50 bps coming in the September-to-December period."
The market will monitor Fed Chair Janet Yellen's comments at a panel event hosted by Harvard University on Friday.
"I see all the other Fed presidents making comments and it seems to me like they want to raise rates in June," said Walter Pehowich, executive vice president at precious metals wholesaler Dillon Gage Metals.
"I'm really looking forward to hearing what (Yellen) says to see if she puts the kibosh on it."
In Asia, top consumer China's gold imports via main conduit Hong Kong dipped in April from a three-month high in the previous month, data showed on Thursday.
"The absence of physical demand is a bit alarming in a market where price is so much driven by investment, which can flip very easily," Natixis analyst Bernard Dahdah said.
Among other precious metals, spot silver XAG= rose 0.4 percent to $16.33 an ounce, platinum XPT= gained 0.1 percent to $989 and palladium XPD= jumped by 2.4 percent to $540.72.
Additional reporting by Vijaykumar Vedala in Bengaluru; Editing by David Goodman and Alan Crosby