Gold under pressure as dollar firm despite weak data

MANILA (Reuters) - Gold was steady above $1,200 an ounce on Tuesday after falling off a two-week peak the session before, struggling to push higher as the dollar hovered near an 11-year high.

The greenback, bolstered by expectations that the U.S. Federal Reserve is on track to raise interest rates this year, shrugged off a batch of soft U.S. data including weak consumer spending and factory activity.

FUNDAMENTALS

* Spot gold XAU= was nearly flat at $1,207.25 an ounce by 0012 GMT. It touched a two-week high of $1,223.20 on Monday on firm Chinese demand before closing lower.

* U.S. gold for April delivery GCcv1 was also little changed at $1,207.50 an ounce.

* U.S. consumer spending fell for a second straight month in January as households continued to cut back on purchases. Factory activity slowed in February and construction spending declined sharply in January, adding to signs that economic growth moderated early in the first quarter.

* Still, most analysts believe the Fed is on course to raise interest rates this year for the first time since 2006 amid a generally strengthening U.S. economy led by gains in its labour market.

* Janet Yellen’s premium on consensus may lead to a Federal Reserve decision the chair hasn’t yet endorsed, as a near majority aligns in favour of a possible June interest rate hike.

* China’s slowing economy will be at the forefront as parliament convenes for its annual meeting this week, with a weekend interest rate cut a reminder of the challenge of balancing painful restructuring with combating the onset of deflation.

* Silver Wheaton Corp (SLW.TO) said it would pay $900 million for the right to buy an additional 25 percent of future gold production from Vale SA’s (VALE5.SA) Salobo mine in Brazil, boosting its 2015 gold output to 230,000 ounces.

* Greece has revoked authorization that Eldorado Gold Corp (ELD.TO) needs to complete its Skouries project, the Canadian miner said, adding that it might have to reconsider its investment plans.

* For the top stories on metals and other news, click [TOP/MTL> or [GOL/>

MARKET NEWS

* The U.S. dollar hovered just below a fresh 11-year peak against a basket of major currencies as rising Treasury yields helped it prevail against the euro in a choppy session. [USD/>

* U.S. stock prices rallied on Monday, with the Nasdaq composite crossing 5,000 for the first time in 15 years. [MKTS/GLOB>

(Reporting by Manolo Serapio Jr.)

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