Strong US Housing Data Keeps Gold Below $1,200

Singapore: Gold hovered below $1,200 an ounce on Thursday, following its biggest drop in over a month, as strong U.S. housing data stoked expectations the Federal Reserve would soon hike interest rates.

Fundamentals

* Spot gold was flat at $1,187.20 an ounce by 0036 GMT, near its lowest in a week.

* The metal fell 1.3 per cent on Wednesday, its biggest single day decline since March 6.

* Bullion took a hit after data showed U.S. home resales surged to their highest level in 18 months in March as more homes came on the market.

* The data prompted many to think the Fed could raise interest rates as early as June.

* Investors believe higher rates could dent demand for gold, a non-interest-paying asset.

* Focus will now be on more U.S. data to be released later in the day and the Fed's policy meet later this month, as traders look out for stronger clues about the timing of the rate hike.

* Markets were also eying the unfolding of the Greek debt crisis.

* Greece can scrape together enough cash to meet its payment obligations into June, euro zone and Greek officials said on Wednesday, playing down fears of an imminent default as hopes receded of a deal with its creditors to release fresh aid.

* Uncertainty over the crisis, which could lead to Greece leaving the euro zone, could boost safe-haven bids for gold.

* In other industry news, gold purchases in India rose sharply during the Akshay Tritiya festival earlier this week, one of the busiest gold buying days, industry officials said.

* Chile's environmental regulator SMA said on Wednesday it would seek new sanctions against Barrick Gold Corp's massive Pascua-Lama gold and silver project, further complicating the possibility that the suspended mine might resume construction.