PRECIOUS-Gold holds ground on weak Europe data; firm dollar caps gains

Market data chart with calculator

* Gold prices down over 1 percent so far this week

* U.S. retail sales boosts dollar

* Palladium eyes best week in 5; platinum hits week high

By Brijesh Patel

April 18 (Reuters) - Gold steadied on Thursday as weakmanufacturing data out of Europe kindled some concerns overglobal growth, but bullion held near a four-month low, pressuredby gains in the U.S. dollar on data showing robust U.S. retailsales.

Spot gold XAU= was up 0.1 percent to $1,275.39 an ounce asof 10:42 a.m EDT (1442 GMT), having fallen to its lowest sinceDec. 27 at $1,270.63 earlier in the session. U.S. gold futures GCcv1 rose 0.1 percent to $1,277.50.

The metal has so far lost more than 1 percent in theholiday-shortened week and was on track for a fourth straightweekly decline.

Most markets are closed for Good Friday on April 19.

"Gold is up slightly on short-covering for the weekend andon weak manufacturing news from the euro zone, but it's barelyholding today because the dollar index is over the 97 mark andretail sales were uninflationary," said George Gero, managingdirector at RBC Wealth Management.

Euro zone businesses started this quarter on the back foot,with growth unexpectedly slowing again, surveys showed.

However, gold's gains were capped by a stronger dollar, withthe U.S. currency .DXY rising against a basket of six rivalsafter U.S. retail sales increased by the most in 1-1/2 years inMarch, indicating economic growth picked up in the first quarterafter a false start. USD/*:nLNSIFEF2A

A stronger dollar makes gold costlier for investors holdingother currencies.

"Gold has had the viscosity of molasses recently wheremarket expectations for follow-on moves after technical signalsare continually disappointed," said Tai Wong, head of base andprecious metals derivatives trading at BMO.

"If gold can hold lows after this unusual positive surprise,it indicates selling pressure at current levels may be limitedand we could be near the bottom of the range."

Also on investors' radar will be developments in the globaltrade front, with the U.S. and China aiming to concludenegotiations by early June, the Wall Street Journal reported onWednesday.

Among other metals, silver XAG= fell 0.16 percent to$14.97 per ounce.

Platinum XPT= rose 1.1 percent to $892.50, having hit itshighest in about a week, at $894.30.

Palladium XPD= gained 0.5 percent to $1,409.01, havingearlier climbed to its highest in two weeks at $1,417.50,putting the autocatalyst metal on track for its best week infive.

"Sure, stronger Chinese economy could lead to more demandbut that might be months down the road. The deficit certainly isstill there but the near term imbalances seem to be easing,"BMO's Wong said.

China's economic growth in the first quarter remained steadyat 6.4 percent, topping expectations for a 6.3 percentexpansion, which analysts said could have driven palladium'sjump on Wednesday.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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