Gold: Gold falls on dollar advance, Fed rate hike prospects

BASICS

* Spot gold fell 0.3% to $1,832.42 an ounce as of 0051 GMT. Bullion is down 1.7% this week. US gold futures fell 0.6% to $1,841.00.

* The dollar index rose 0.1%. Gold competes with the dollar as a safe store of value, and currency gains also make bullion unattractive to foreign buyers.

* Two Fed officials on Thursday said the Federal Reserve probably should have raised interest rates more than it did earlier this month, warning that further hikes in borrowing costs are essential to bring inflation back to desired levels.

* Money markets now expect interest rates to rise above 5% by May and remain at that level throughout the year.

* Gold is known as a safe haven amid inflationary woes, but high interest rates increase the opportunity cost of holding bullion without a return.

* Data on Thursday showed that the number of Americans filing new jobless claims fell unexpectedly last week.

* Labor Department data showed monthly producer prices accelerated in January. The final consumer price index rebounded 0.7% last month after falling 0.2% in December.

* The 10-year government bond yield rose to its highest level since late December.

* Spot silver was down 0.6% to $21.48 an ounce, platinum was down 0.4% to $916.66 and palladium was down 0.6% to $1,501.09.

DATA/EVENTS (GMT)

0700 UK Retail Sales MM,YY Jan

0700 UK Retail Sales Ex-Fuel MM Jan

0745 France CPI (EU norm) Final MM, YY Jan

1330 US import prices JJ Jan