Strong U.S. housing data keeps gold below $1,200

SINGAPORE (Reuters) - Gold hovered below $1,200 an ounce on Thursday, following its biggest drop in over a month, as strong U.S. housing data stoked expectations the Federal Reserve would soon hike interest rates.

FUNDAMENTALS

* Spot gold was flat at $1,187.20 an ounce by 0036 GMT, near its lowest in a week.

* The metal fell 1.3 percent on Wednesday, its biggest single day decline since March 6.

* Bullion took a hit after data showed U.S. home resales surged to their highest level in 18 months in March as more homes came on the market.

* The data prompted many to think the Fed could raise interest rates as early as June.

* Investors believe higher rates could dent demand for gold, a non-interest-paying asset.

* Focus will now be on more U.S. data to be released later in the day and the Fed's policy meet later this month, as traders look out for stronger clues about the timing of the rate hike.

* Markets were also eying the unfolding of the Greek debt crisis.

* Greece can scrape together enough cash to meet its payment obligations into June, euro zone and Greek officials said on Wednesday, playing down fears of an imminent default as hopes receded of a deal with its creditors to release fresh aid.

* Uncertainty over the crisis, which could lead to Greece leaving the euro zone, could boost safe-haven bids for gold.

* In other industry news, gold purchases in India rose sharply during the Akshay Tritiya festival earlier this week, one of the busiest gold buying days, industry officials said.

* Chile's environmental regulator SMA said on Wednesday it would seek new sanctions against Barrick Gold Corp's massive Pascua-Lama gold and silver project, further complicating the possibility that the suspended mine might resume construction.

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

MARKET NEWS

* The dollar was mixed against other major currencies on Wednesday after a jump in U.S. home sales data.

* Stocks in major markets drifted higher on Wednesday as investors took an optimistic view of the latest batch of U.S. corporate earnings.

DATA/EVENTS (GMT)

0145 China HSBC manufacturing PMI flash Apr

0600 Germany GfK consumer sentiment May

0700 France Markit manufacturing PMI flash Apr

0730 Germany Markit manufacturing PMI flash Apr

0800 Euro zone Markit manufacturing PMI flash Apr

1230 U.S. Weekly jobless claims

1345 U.S. Markit manufacturing PMI flash Apr

1400 U.S. New home sales Mar

PRICES AT 0036 GMT

Metal Last Change Pct chg

Spot gold 1187.2 0.3 0.03

Spot silver 15.78 0.01 0.06

Spot platinum 1128.1 -1.25 -0.11

Spot palladium 756.6 3.1 0.41

Comex gold 1186.4 -0.5 -0.04

Comex silver 15.75 -0.046 -0.29

Euro 1.0706

DXY 98.173

COMEX gold and silver contracts show the

most active months

(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)