Gold near one-week low as U.S. rate hike bets boost dollar

SINGAPORE (Reuters) - Gold hovered near a one-week trough on Friday and was set to snap a three-week rally, pressured by renewed expectations for a U.S. rate hike this year despite recent soft economic data.

FUNDAMENTALS

* Spot gold was little changed at $1,194.71 an ounce by 0017 GMT, after slipping to a session low of $1,192.30 on Thursday. Bullion is down 1.3 percent so far this week following a three-week rise.

* U.S. gold for June delivery was also nearly flat at $1,194.60 an ounce.

* Bullion prices were back to levels where they were before the release of much softer-than-expected U.S. employment data last week. That lifted gold to a seven-week high above $1,220 on Monday as investors pared back forecasts for a U.S. rate increase following the dismal jobs number.

* The non-interest bearing metal took a hit from comments from Federal Reserve officials which suggested that a rate hike in June could still be in play, along with minutes of the Fed's March meeting that opened the door to an increase during that month.

* Gold prices could drop to five-year lows this year, extending two years of decline before they rebound in 2016 on a demand recovery in Asia, GFMS analysts at Thomson Reuters said.

* Gold demand in the world's biggest consumer India risks falling for a second straight year in 2015, as millions of Indian farmers hit by erratic weather and falling commodity prices trim purchases.

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MARKET NEWS

* The dollar held at three-week highs against a basket of major currencies as the hapless euro extended its decline and disappointing trade data knocked sterling. [USD/]

* U.S. crude oil held above $50 a barrel on strong German economic data and uncertainty about negotiations on Iran's nuclear programme. [O/N]

DATA AHEAD (GMT)

0130 China Consumer prices Mar

0130 China Producer prices Mar

0645 France Industrial output Feb

1230 U.S. Import prices Mar

1230 U.S. Export prices Mar

1800 U.S. Federal budget Mar

Precious metals prices 0017 GMT

Metal Last Change Pct chg YTD pct chg

Spot Gold 1194.71 0.25 +0.02 0.94

Spot Silver 16.17 0.06 +0.37 3.26

Spot Platinum 1154.24 -0.26 -0.02 -3.81

Spot Palladium 758.98 -1.00 -0.13 -4.25

COMEX GOLD JUN5 1194.60 1.00 +0.08 0.89

COMEX SILVER MAY5 16.17 -0.01 -0.04 3.66

Euro/Dollar 1.0664

Dollar/Yen 120.53

COMEX gold and silver contracts show the most active months

(Reporting by Manolo Serapio Jr.; Editing by Ed Davies)