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PRECIOUS-Gold dips to near 5-week low as dollar trumps euro post ECB

Swati Verma

(Updates prices, adds fresh quotes and details)

* Dollar hits 3-week peak

* ECB cuts growth, inflation forecasts

* Markets await U.S. non-farm payrolls due on Friday

March 7 (Reuters) - Gold eased on Thursday as the dollar gained versus the euro after the European Central Bank postponed an interest rate hike, wiping out gains for bullion driven by the darkening global economic outlook.

Spot gold slipped 0.2 percent to $1,283.71 an ounce at 1403 GMT, trading close to a more than five-week low of $1,280.70 hit this week.

U.S. gold futures fell 0.3 percent to $1,284.40.

"The euro slumping hard has driven the dollar index smartly higher and is weighing on gold which has given up all its post ECB gains," said Tai Wong, head of base and precious metals derivatives trading at BMO.

The dollar scaled a 3-week peak as the euro dipped after the ECB postponed the timing of its first post-crisis rate hike to 2020 at the earliest.

The central bank slashed its growth and inflation forecasts for 2019 and lowered those for 2020 and 2021, acknowledging that Europe's slowdown is longer and deeper than earlier thought.

The ECB announcement compounded increasing worries of a global slowdown, helping bolster the overall sentiment for bullion, considered a safe store of value during times of economic or political uncertainty.

Investors have now turned their attention to the U.S. non-farm payrolls report on Friday, which could provide further signals on the strength of the economy and how it would affect the Federal Reserve's monetary policy.

"Gold is behaving in a relatively lackluster form. We have got the U.S. jobs data tomorrow which might give us a good indication of what to expect from here," said Ross Norman, chief executive at Sharps Pixley.

Slower U.S. economic growth is not necessarily cause for alarm but a new normal, a top Fed official said on Wednesday, underscoring policymakers' comfort with interest rates at current levels.

Gold is highly sensitive to U.S. interest rates because higher rates increase the opportunity cost of holding non-yielding bullion and boost the dollar.

On the technical front, "key short-term support for gold comes in at $1,280, while resistance is seen around $1,300," said analyst Fawad Razaqzada.

Also supporting gold was strong buying from central banks, analysts said, with China, the world's biggest consumer of the metal, increasing its gold reserves to 60.260 million fine troy ounces in February from 59.940 million troy ounces at end-January.

Among other precious metals, palladium slipped 0.2 percent to $1,535.05 an ounce and silver was down 0.3 percent at $15.03. Silver touched a low of $14.99, its weakest since the end of December.

Platinum dipped 0.3 percent to $824.13. (Reporting by Swati Verma in Bengaluru Editing by David Goodman and Alexandra Hudson)