* Gold up 0.8 percent so far this week
* Platinum up about 3 pct so far this week
* March euro zone business growth worse than expected -PMI
By Sumita Layek
March 22 (Reuters) - Gold prices rose on Friday as disappointing
economic data from the euro zone added to concerns of a slowdown in
global growth and drove investors away from riskier assets.
Spot gold was up 0.2 percent at $1,311.71 per ounce by 1300
GMT, while U.S. gold futures gained 0.3 percent to $1,311.2.
"It is about the weakness in the economy in the euro zone and
outlook for interest rates which makes holding gold more
attractive," said Quantitative Commodity Research analyst Peter Fertig.
Businesses across the euro zone performed much worse than expected
this month as factory activity contracted at the fastest pace in
nearly six years, hurt by a big drop in demand, a survey showed.
"The data...was weaker than the consensus. This is weighing
on interest rates in the euro zone and bond yields," Fertig said.
Germany's benchmark 10-year government bond yield turned negative
for the first time since October 2016, while European stocks wiped out
early gains after the data was released.
Gold prices rose to their highest since Feb. 28 on Thursday at
$1,320.22. Despite paring some of those gains, they were still on
track for a third straight weekly gain, up about 0.8 percent so far.
"Gold could not break above $1,320 on the upside and saw a
correction. The current trading range seems to be between
$1,305-$1,320," said Afshin Nabavi, senior vice president at MKS SA.
"I still believe that with the geopolitical and the
(uncertain) Brexit situation, we may be heading higher."
EU leaders have given Prime Minister Theresa May a two-week
reprieve, until April 12, before Britain could lurch out of the EU if
she fails to persuade lawmakers to back the withdrawal treaty she
concluded with Brussels.
The Fed's decision earlier this week to bring its three-year drive
to tighten monetary policy to an abrupt end, abandoning projections
for any interest rate hikes this year.
Lower interest rates reduce the opportunity cost of holding
non-yielding gold and weigh on the dollar.
Among other precious metals, spot palladium dipped about 2.5
percent to $1,567.60 per ounce, after touching an all-time high of
$1,620.53 in the previous session.
Concerns about a deep supply deficit and increased speculative
buying interest have pushed palladium prices to record levels,
Silver was down 0.3 percent at $15.42 per ounce, and platinum
fell 0.6 percent to $853.51 per ounce, but was up about 3 percent so
far this week.
(Reporting by Sumita Layek in Bengaluru; Editing by Kirsten Donovan
and Louise Heavens)
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