Gold holds losses from biggest dip in five months after Fed rate hike

SINGAPORE (Reuters) - Gold steadied on Friday but largely retained losses made a day earlier when the metal suffered its biggest slide in five months after the Federal Reserve hiked U.S. rates for the first time in nearly a decade.

FUNDAMENTALS

* Spot gold ticked up 0.3 percent to $1,053.96 an ounce by 0051 GMT as the dollar eased on profit taking following sharp gains.

* The metal slid 2 percent on Thursday, its biggest one day slide in five months. It is down 2 percent for the week in its worst weekly performance in six weeks.

* Gold has come under intense sell off since the Federal Reserve raised the range of its benchmark interest rate by a quarter of a percentage point on Wednesday, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.

* The move sent the dollar to a two-week high on Thursday against a basket of major currencies.

* On the other hand, gold saw little interest, with investors sending the yellow metal to $1,047.25 in the previous session, close to a near-six-year low.

* Gold has tumbled 11 percent this year, largely on uncertainty around the timing of the rate rise and on fears that higher rates would hit demand for the non-interest-paying metal.

* Many are predicting further drops. Gold is likely to test the key $1,000 level soon, technical analysts said.

* Assets in SPDR Gold Trust , the world's top gold-backed exchange-traded fund, fell 0.70 percent to 630.17 tonnes on Thursday, the lowest since September 2008.

* Hedge funds' net short positions in COMEX gold futures reached record levels this month.

* Other precious metals were all struggling due to the robust dollar.

* Silver held on to an overnight slump of 3 percent, its biggest one day drop in nearly three months, while platinum eased after posting its biggest slide in a year. Both the metals were headed for weekly declines.

* With a 2 percent gain, palladium was the best performer among the precious metals this week, though it did decline overnight by 2.5 percent.

MARKET NEWS

* Asian shares took their cue from Wall Street and slipped on Friday, but were still on track for gains in a week marked by a depreciating yuan in China and the first U.S. interest rate hike in nearly a decade.

(Reporting by A. Ananthalakshmi; Editing by Ed Davies)