(Corrects seventh graph to clarify investors expect U.S. Fed tocut interest rates by 25 basis points and not 0.25 basis points)
* Gold set for first weekly decline in three weeks
* U.S. GDP data due at 1230 GMT
* Silver and platinum on track for third weekly gainBy Karthika Suresh Namboothiri and Arpan VargheseJuly 26 (Reuters) - Gold firmed on Friday, having shed 1% inthe previous session on robust U.S. jobs data, with investorsawaiting further economic readings from Washington that coulddrive sentiment going into next week's Federal Reserve meeting.Spot gold was up 0.5% to $1,420.78 an ounce at 1205GMT. U.S. gold futures gained 0.4% to $1,420.50Prices were still on track for a first weekly drop in three,pressured in part by a stronger dollar and spillover fromThursday's slide after comments from European Central BankGovernor Mario Draghi lowered expectations for an immediate cutto interest rates.Draghi cautioned against pulling the trigger too quickly onpolicy easing, though he all but pledged to loosen monetarysettings further as the growth outlook deteriorates .
"Gold is consolidating in a broad range from $1,400 to$1,440," said Jigar Trivedi, commodities analyst at Mumbai-basedAnand Rathi Shares & Stock Brokers, adding that support has beenprovided by ECB hints of stimulus from September.Capping gold's momentum, the dollar held near two-monthhighs as the market awaited second-quarter U.S. gross domesticproduct numbers that are expected to show the slowest growth inmore than two years. The data is due at 1230 GMT. Amid tepid data from the world's largest economy, investorsexpect the U.S. Fed to cut interest rates by 25 basis points atits policy meeting ending on July 31."The market will now focus its attention on next week's Fedmeeting ... if Fed Chair Powell indicates that a rate cut cycleis imminent, the dollar is likely to depreciate, which should inturn benefit gold," Commerzbank said in a note.
On the trade war front, uncertainties over whetherWashington and Beijing will be able to settle their differenceskept many investors on their guard. Negotiators from the twosides will meet in Shanghai next week."We expect gold prices to reduce further in coming sessions... nonetheless as geopolitical risk in the middle east hasescalated, there might be limited downside," said Anand Rathianalyst Trivedi.
In other precious metals, platinum rose 0.2% to$867.09 an ounce while palladium edged up 0.3% to$1,535.42. Silver , meanwhile, firmed by 0.5% to $16.48."Silver is cheap relative to gold, so it has biggerpotential. It is going to pull back lower ... any dip below $16could push buying," said Gianclaudio Torlizzi, managing directorat consultancy T-Commodity in Milan.Silver was on track for a third week of gains, having risen1.7% so far. (Reporting by Karthika Suresh Namboothiri and Arpan Varghese inBengaluru; Editing by MarkPotter)
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