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PRECIOUS-Gold firm after U.S. data adjusts Fed rate hike views

Sept 16 (Reuters) - Gold prices rebounded early on Friday
from a near two-week low in the previous session, after
disappointing U.S. economic data reduced the chances of an
interest rate hike next week, though the metal was still on
track for its first weekly loss in three. 
    
    FUNDAMENTALS
    * Spot gold was up 0.2 percent at $1,316.30 an ounce
by 0052 GMT, but was on track to end the week down nearly 1
percent.
    * U.S. gold futures rose 0.1 percent to $1,319.80 an
ounce.
    * U.S. retail sales fell more than expected in August amid
weak purchases of automobiles and a range of other goods,
pointing to cooling domestic demand. 
    * The economic growth outlook also took a hit from other
data on Thursday showing a drop in manufacturing output last
month. The reports, which extended August's run of weak data,
prompted economists to cut their growth estimates for the third
quarter.
    * In a second report, the Fed said manufacturing output fell
0.4 percent in August, reversing July's increase.
    * U.S. weekly jobless claims data showed on Thursday a
tightening labor market with subdued layoffs last week, while
underlying producer price inflation crept up in August.
 
    * Chances the U.S. Federal Reserve will raise interest rates
in December have shot up in the past month, according to a
Reuters poll that showed economists are more convinced a move is
on its way despite weak inflation and wage growth. 
    * Barrick Gold Corp said on Thursday that
operations at its Veladero mine in Argentina were temporarily
suspended by the government after a "small quantity" of
processing solution that contains cyanide leaked outside a
processing area. 
    * India's gold imports fell for a seventh straight month in
August to $1.1 billion as sluggish demand and record high
discounts prompted banks and refineries to reduce overseas
purchases of bullion. 
    * Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, fell 0.35 percent to 932.23
tonnes on Thursday.
    * For the top stories on metals and other news, click
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    MARKET REPORT
    *  Asian stocks firmed on Thursday after weak U.S. data
reduced the already low chance of an interest rate increase by
the Federal Reserve at next week's meeting, sending the Treasury
yield curve surging to its steepest level in 2-1/2 months.
 

    DATA/EVENT AHEAD (GMT)
    0900 Euro zone Labour costs Q2 
    1230 U.S. Consumer prices August 
    1400 U.S. Univ of Michigan sentiment index September 
    1530 U.S. Cleveland Fed CPI August

 (Reporting by Swati Verma in Bengaluru; Editing by Ed Davies)
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