* Gold set for weakest week since week of Aug. 1.
* Uptrend still in place but corrections possible
* Coming Up: G20 meeting starting Friday
(Updates throughout with comment, prices)
By Amanda Cooper
LONDON, Oct 21 (Reuters) - Gold was set for its first weekly
decline in 12 weeks on Thursday after U.S. jobs data lifted the
dollar and further eroded investor demand for bullion, although
several analysts said they viewed this as temporary.
Gold is on course for a 1.9 percent fall this week, the
first week of net declines since the week ended Aug. 1, while
holdings of gold in the world's largest exchange-traded fund,
the SPDR Gold Trust <GLD>, fell for a fourth consecutive
occasion, indicating lower investment appetite.
Spot gold <XAU=> hit a high of $1,349.05 an ounce before
slipping to $1,345.15 by 1358 GMT, versus $1,343.50 on
Wednesday. U.S. gold futures for December delivery <GCZ0> were
up $1.5 an ounce at $1,345.70.
The dollar pared losses against a basket of currencies
<.DXY> after weekly U.S. jobless claims fell by more than
expected, soothing some fear about the health of the ability of
the economy to generate jobs.
Yet analysts said the pervading investor concern over the
global economy and the reliability of paper currencies that has
driven the dollar to 15-year lows against the yen <JPY=> and
nine-month lows versus the euro <EUR=> and boosted gold has not
disappeared.
"The long-term factors that have driven gold higher over the
last twelve to eighteen months are largely intact," said HSBC
analyst James Steel. "Gold has been rallying in all currencies,
which implies that it's not an entirely a U.S. dollar
phenomenon."
"That's evidence of a lack of faith in paper assets ...
investors are not greatly enthused over the success of monetary
and fiscal policy," he said.
FOLLOWING DOLLARS
Gold earlier benefitted from weakness in the dollar after
U.S. Treasury Secretary Timothy Geithner was quoted by the Wall
Street Journal as calling for "norms" on exchange rate policy.
Financial markets are alight with speculation over a
possible bargain by finance ministers and central bank chiefs of
the Group of 20 countries to rebalance the global economy.
Officials meet on Friday in Gyeongju, South Korea to discuss
a common path on managing currency, trade and economic
imbalances ahead of a G20 summit meeting in Seoul next month.
[]
Reflecting the lower appetite among investors for gold right
now, SPDR said its holdings eased to 1,299.177 tonnes by Oct 20
from 1,300.089 tonnes on Oct 19. The holdings hit a record at
1,320.436 tonnes on June 29. []
The gold price has fallen by nearly 2 percent in dollar
terms this week and is down by 1.8 percent in euros <XAUEUR=R>,
down 2 percent in yen <XAUJPY=R> and down 1.2 percent in Swiss
francs <XAUCHF=R>.
Gold benefits from dollar weakness, firstly as it becomes
cheaper to non-U.S. buyers, but also profits from any investor
nervousness stemming from declines in the greenback.
The strength in the dollar in the past week has stripped
more than 3 percent off the gold price since it hit a record
high just above $1,387 last week.
Gold also shed nearly 3 percent on Tuesday in its largest
one-day fall since July following China's surprise announcement
of an interest rate rise.
"Despite the renewed dollar weakness, we've been struggling
to regain traction to the upside. There have been a lot of
investors going into gold already and probably at this juncture,
would probably be a little hesitant, because now everyone is
focusing on currency moves and the outcome of what could happen
at the weekend," said Ole Hansen, a senior manager at Saxo Bank.
Silver <XAG=> pared earlier losses to trade roughly flat at
$23.91 an ounce.
Data from the Swiss Customs Office showed imports and
exports of platinum and palladium fell in September from August.
[]
Platinum prices were last up 0.5 percent at $1,687.49, while
palladium <XPD=> drew strength from the rally in the base metal
complex and rose 1.9 percent to $595.49 an ounce.
(Editing by William Hardy)
