* Many markets closed on Friday for Easter holiday
* Hopes for Ukraine initiative dent safe-haven bids
* Platinum down 1.9 pct on Thursday on easing supply fears
By Clara Denina
LONDON, April 18 Gold was heading for a 1.8
percent weekly fall on Friday, dented by hopes that diplomatic
efforts can calm violence in Ukraine and by strengthening U.S.
Fears over slowing demand in top consumer China and
sustained sales from gold-backed funds also contributed to its
fall below $1,300 an ounce.
In thin Easter holiday trade on Friday, spot gold was
unchanged at $1,294.80 an ounce by 0920 GMT, while gold futures
for June delivery closed down 0.8 percent at $1,293.90
an ounce on Thursday.
There will be no London gold fixing - the twice-daily
price-setting benchmark - on Friday and Monday because the UK is
on holiday. The U.S. market will be closed on Friday.
"The price of gold dropped this week ... as further evidence
emerged of an improvement in the U.S. economy," Natixis analyst
Bernard Dahdah said.
"As the U.S. economy 'normalises', so debate at the Fed is
clearly mounting over how and when to renormalise interest
rates," he added. "If further strengthening of U.S. economic
data were to raise expectations of a renormalisation of interest
rates, gold prices would once more come under pressure."
Earlier this week the Federal Reserve Chair Janet Yellen
reiterated an accommodative monetary policy stance. Low interest
rates, which cut the opportunity cost of holding non-yielding
bullion above other assets, have been an important factor
driving gold higher.
But Yellen's remarks were offset by U.S. economic data
pointing to activity picking up after disruptions due to harsh
Gold's main prop over the past few sessions has been its
role as an insurance against the market risks raised by
escalating tensions between Russia and the West over Ukraine.
But these eased somewhat on Thursday after the United
States, Russia, Ukraine and the European Union called for an
immediate halt to violence.
Implying underlying investor bearishness and pessimism over
the longer-term outlook, holdings in the world's biggest
exchange-traded fund, SPDR Gold Trust, fell 8.39 tonnes to
798.43 tonnes on Wednesday, the biggest daily outflow since late
PLATINUM DOWN ON POSSIBLE END TO S.AFRICAN STRIKE
Platinum was unchanged at $1,404.50 an ounce, having posted
its biggest daily loss since January, down 1.9 percent, in the
previous session after South Africa's biggest platinum producers
offered to raise wages for miners in a bid to end a 13-week-old
Anglo American Platinum Ltd and Impala Platinum
Holdings Ltd said they proposed a settlement to end
South Africa's longest and most damaging mining strike in living
Among other precious metals, silver was down 0.1
percent at $19.58 an ounce and palladium was unchanged at
$794.00 an ounce.
(Editing by Ruth Pitchford)