Greek hopes, robust US data keep gold near three-week low

SINGAPORE (Reuters) - Gold was near its lowest in three weeks on Thursday, as robust U.S. economic data boosted prospects of higher interest rates and as signs emerged of progress in the Greek debt crisis.

Spot gold was little changed at $1,185.36 an ounce by 0048 GMT, after losing 0.7 percent in the previous session. The metal fell to $1,179.43 on Wednesday, its lowest since May 11.

Data on Wednesday showed that the U.S. trade deficit narrowed in April on a drop in imports, while companies picked up their hiring in May after a pullback the previous month.

The data supported the notion the economy has recovered somewhat from a first-quarter contraction and bolstered expectations the Federal Reserve may consider raising interest rates later this year.

Higher rates would dent demand for non-interest-paying gold, while boosting the dollar.

Investors were now awaiting U.S. nonfarm payrolls data on Friday for more clues about the economy and how it would impact the Fed's interest rate policy.

Greece's international creditors signalled on Wednesday they were ready to compromise to avert a default even as a defiant Athens warned it might skip an IMF loan repayment due this week.

Failure to reach agreement this month could trigger a Greek default and lead to the imposition of capital controls and a potential exit from the euro zone, dealing a serious blow to Europe's supposedly irreversible single currency.

Bullion had gotten some support in recent sessions from the uncertainties over the Greek debt crisis as investors sought safety in the metal.

For the top stories on metals and other news, click [TOP/MTL] or [GOL/]

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin)