* 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 (Reuters) - 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. economic data.
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 winter weather.
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 December.
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 strike.
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 memory.
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)