* Markets await Fed Chair Janet Yellen's speech later in the
* Gold heading for first weekly drop in 5
* Silver on track for first weekly drop in 10
* Silver, platinum on track for worst week since December
(Adds comment, updates prices)
By Sethuraman N R
March 3 Gold fell on Friday and was on track for
its first weekly decline in five, its worst since November, on
growing expectations of a U.S. rate hike as early as this month.
Spot gold dropped 0.3 percent to $1,231.31 per ounce
at 0730 GMT, after hitting a low of $1,229.05 earlier in the
session. The metal has lost nearly 2.3 percent so far this week.
U.S. gold futures fell 0.1 percent to $1,231.
Increasing chances of a rate hike should keep a lid on any
gold rallies leading into the March meeting, MKS PAMP Group
trader Sam Laughlin said.
"With (U.S. Federal Reserve) President Janet Yellen on the
wires tonight, we look to see further weakness across the
precious complex should she, as expected, promote the potential
for an interest rate increase in March," Laughlin said.
"Initial support for gold sits around $1,230, while below
this we look to the 100 day moving average at $1,210."
Yellen and Fed Vice Chair Stanley Fischer are both due to
speak later on Friday.
The number of Americans filing for unemployment benefits
fell to near a 44-year low last week, pointing to further
tightening of the labor market even as economic growth appears
to have remained moderate in the first quarter.
A surge in business and consumer confidence during President
Donald Trump's first weeks in office has helped push the Fed
toward its first sustained series of interest rate hikes in more
than a decade, despite a dearth of firm policies from the
Spot gold may temporarily hover above a support at $1,232
per ounce and then bounce towards a resistance at $1,241 before
falling again, according to Reuters technical analyst Wang Tao.
A correction in gold, however, is likely to be shallow as
investors remained friendly to bullion as a hedge against global
uncertainty and rising inflation, analysts said.
ABN Amro lifted its year-end 2017 gold price forecast by
$200 to $1,300 on Thursday, while Commerzbank said any setbacks
to prices should be limited and short-lived due to uncertainty
over Trump's policies and European elections.
"I don't see gold going below $1,220, unless the dollar is
moving really high as we still see several uncertainties in the
first half of the year," said Ronald Leung, chief dealer at Lee
Cheong Gold Dealers in Hong Kong.
Holdings of SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, rose 0.21 percent to 845.32
tonnes on Thursday from Wednesday.
Spot silver held firm at $17.78, after falling 3.5
percent to hit a 3-week low of $17.64 on Thursday. The metal had
its worst one-day fall since Dec 15. It is on track to end the
week down 3 percent, its worst since December.
Platinum was steady at $987, after falling 3 percent
in the previous session to hit one-month low of $978.75.
Palladium rose 0.1 percent to $768.75.
(Reporting by Nallur Sethuraman in Bengaluru; Editing by
Richard Pullin and Amrutha Gayathri)