Gold set for longest weekly losing streak since 1999

Gold slipped on Friday and was on course for a sixth straight weekly fall

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Gold slipped on Friday and was on course for a sixth straight weekly fall, its longest retreat in 16 years, as the dollar remained firm after upbeat U.S. economic data encouraged bets on the Federal Reserve raising interest rates in September.

Bullion was set to end July with its biggest monthly decline in more than two years after a deep rout last week shook investor confidence further and drove prices to a 5-1/2 year low of $1,077 on July 24. The metal has lost 7.4 percent so far for the month, its steepest decline since June 2013.

"Gold is an asset that pays no interest or coupon and the rate hike is certainly putting pressure on prices," ING Bank senior strategist Hamza Khan said.

"We could see the fall extending to a triple-digit level, but that could trigger some buying, especially among Asian consumers."

Spot gold fell 0.6 percent to $1,081.30 an ounce by 0945 GMT, losing 1.6 percent for the week. U.S. gold for August delivery dropped 0.9 percent to $1,079.10 an ounce.

The dollar was steady against a basket of currencies, on track for an almost two percent monthly rise, making dollar-denominated bullion more expensive for foreign investors.

Data on Thursday showed the U.S. economy grew 2.3 percent in the second quarter, while first-quarter gross domestic product
was revised to show growth of 0.6 percent instead of a contraction.

That reinforced expectations the Federal Reserve is on track to raise interest rates, possibly at its next meeting in September. Higher interest rates would increase the opportunity cost of holding non-yielding bullion.

The data followed the Fed's policy meeting earlier this week at which policymakers concluded that the world's largest economy is "expanding moderately".

The next important data release is U.S. non-farm payroll figures, due on Aug. 7.

The Fed will not need to see balanced risks to the economy to proceed with an interest rate hike in September, according to former Fed officials and a review of central bank statements through recent turns in policy.

"That big overhang is enough to keep gold trading at low levels," said Argonaut Securities analyst Helen Lau, referring to the looming U.S. rate increase.

Waning investment demand and weak physical appetite for gold also pose a further downside risk for prices, said Lau.

"Despite trading at multi-year lows, physical demand has been on the low side with premiums in China and India hardlymoving," MKS Group trader Jason Cerisola said in a note.

On the Shanghai Gold Exchange (SGE), premiums stood at just over $1 an ounce on the London spot price, traders said.

In other metals, spot platinum fell 1.4 percent to $972.74 an ounce, palladium dropped 1.3 percent to $610.47 an ounce and silver was down 0.6 percent at $14.59 an ounce.