PRECIOUS-Gold holds ground on weak Europe data; firm dollar caps gains

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* Gold prices down over 1 percent so far this week

* U.S. retail sales boosts dollar

* Palladium eyes best week in 5; platinum hits week high

* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl (Updates prices, adds comments)

By Brijesh Patel

April 18 (Reuters) – Gold steadied on Thursday as weak manufacturing data out of Europe kindled some concerns over global growth, but bullion held near a four-month low, pressured by gains in the U.S. dollar on data showing robust U.S. retail sales.

Spot gold was up 0.1 percent to $1,275.39 an ounce as of 10:42 a.m EDT (1442 GMT), having fallen to its lowest since Dec. 27 at $1,270.63 earlier in the session. U.S. gold futures rose 0.1 percent to $1,277.50.

The metal has so far lost more than 1 percent in the holiday-shortened week and was on track for a fourth straight weekly decline.

Most markets are closed for Good Friday on April 19.

“Gold is up slightly on short-covering for the weekend and on weak manufacturing news from the euro zone, but it’s barely holding today because the dollar index is over the 97 mark and retail sales were uninflationary,” said George Gero, managing director at RBC Wealth Management.

Euro zone businesses started this quarter on the back foot, with growth unexpectedly slowing again, surveys showed.

However, gold’s gains were capped by a stronger dollar, with the U.S. currency rising against a basket of six rivals after U.S. retail sales increased by the most in 1-1/2 years in March, indicating economic growth picked up in the first quarter after a false start.

A stronger dollar makes gold costlier for investors holding other currencies.

“Gold has had the viscosity of molasses recently where market expectations for follow-on moves after technical signals are continually disappointed,” said Tai Wong, head of base and precious metals derivatives trading at BMO.

“If gold can hold lows after this unusual positive surprise, it indicates selling pressure at current levels may be limited and we could be near the bottom of the range.”

Also on investors’ radar will be developments in the global trade front, with the U.S. and China aiming to conclude negotiations by early June, the Wall Street Journal reported on Wednesday.

Among other metals, silver fell 0.16 percent to $14.97 per ounce.

Platinum rose 1.1 percent to $892.50, having hit its highest in about a week, at $894.30.

Palladium gained 0.5 percent to $1,409.01, having earlier climbed to its highest in two weeks at $1,417.50, putting the autocatalyst metal on track for its best week in five.

“Sure, stronger Chinese economy could lead to more demand but that might be months down the road. The deficit certainly is still there but the near term imbalances seem to be easing,” BMO’s Wong said.

China’s economic growth in the first quarter remained steady at 6.4 percent, topping expectations for a 6.3 percent expansion, which analysts said could have driven palladium’s jump on Wednesday. (Reporting by Brijesh Patel in Bengaluru; Editing by Bernadette Baum)

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