Futures & Commodities

Gold ends modestly lower; drops 1% on the week

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Gold settled slightly lower on Friday, logging its second straight weekly loss as the dollar took support from euro weakness and traders awaited further news on Ukraine.

The dollar extended gains against the single currency after posting its biggest one-day rise since mid-March on Thursday, as investors positioned for more monetary stimulus from the European Central Bank.

Chart: Precious Metals

Gold is still searching for direction as concerns over the stand-off between Russia and the West over Ukraine abated, and Federal Reserve Chair Janet Yellen held pat on U.S. monetary policy.

U.S. gold futures for June delivery ended 10 cents lower at $1,287.60 an ounce, down 1 percent on the week. Meanwhile, spot gold dropped 0.1 percent to $1,288 an ounce.

ECB President Mario Draghi said on Thursday that the bank was ready to take action next month to boost the euro zone economy if updated inflation forecasts merited such a move.

"Our European economists are now calling for the ECB to cut rates across the whole interest rate corridor in June by 15 bps,'' UBS said in a note. "For gold, this has a negative read-through, principally through the FX impact.''

See gold declining further: UBS

"It's one further variable ... that will encourage weaker sentiment towards the yellow metal.''

The metal rallied to three-week highs on Monday on the back of elevated tensions in Ukraine, but it failed to maintain those gains after Russian President Vladimir Putin said he was willing to negotiate with European officials over the crisis.

Gold premiums in India, the world's second-biggest bullion consumer, slipped this week as demand eased on expectations of a relaxation in import curbs. Dealers across other parts of Asia also said demand was much lower than last year.

Interest in gold was muted overnight in Asia, the leading market for physical gold.

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