* Dollar rebounds vs euro after hitting 3-week low
* SPDR Gold Trust holdings highest since Aug 2014
* Physical gold demand slows in top consumer China
* Coming up: FOMC meeting March 15-16
(Recasts first paragraph, updates prices; adds comment, second
byline, NEW YORK dateline)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, March 11 Gold fell 1 percent on
Friday, as the dollar rebounded and oil and world stock markets
rose, after bullion extended the prior session's gains to a
13-month high touched in early trade after the European Central
Bank's announcement of additional easing.
ECB President Mario Draghi rolled out measures on Thursday
including increased asset buying and a deeper cut to deposit
rates, but signaled there would be no further rate cuts.
Spot gold rose as far as $1,282.51 an ounce, its
strongest since Feb. 3, 2015, before falling 1 percent to
$1,259.01 by 2:27 p.m. EST (1927 GMT), as the dollar rebounded
from a three-week low versus the euro.
It was on track to close the week flat after last week's 3
U.S. gold for April delivery settled down 1.1 percent
at $1,259.40 an ounce, after peaking at $1,287.80.
"If you were long for significantly negative rates in Europe
and Japan, you've seen what you're going to see, especially from
Europe," said Rob Haworth, senior investment strategist for U.S.
Bank Wealth Management in Seattle.
"If you were long gold because the Fed wasn't going to raise
rates, those odds are increasing so it would be a good time to
The next main market focus is the U.S. Federal Reserve's
policy meeting on March 15-16. The Fed lifted rates for the
first time in nearly a decade in December.
If the Fed leaves rates unchanged next week, gold could
suffer from the resurgence of some short-term risk appetite, ETF
Securities analyst Martin Arnold said.
"In the longer term, gold will probably stay above $1,200,
around the $1,250 area, while $1,300 represents a strong
resistance level," Arnold added.
Supporting bullion, holdings of SPDR Gold Trust, the
world's largest gold-backed exchange-traded fund, rose to 25.68
million ounces on Thursday, the highest since August 2014.
The relatively weak dollar and a repricing of expectations
for U.S. interest rate rises have helped gold rebound by more
than 18 percent this year so far. Bullion regained its role as a
shelter for risk-averse investors, in the face of tumbling
equities and fears of a global economic slowdown.
Physical gold demand slowed in top consumer China this week,
while a strike by jewelers protesting against the imposition of
a tax curbed demand in No. 2 market India.
Spot silver rose 0.1 percent to $15.61 an ounce,
platinum was down 1.1 percent at $965.50 and palladium
gained 1.4 percent to $578.50.
(Additional reporting by Manolo Serapio Jr in Manila; Editing
by Susan Thomas and Chizu Nomiyama)