* Dollar index climbs off seven-week lows
* U.S. new home sales hit 7-month high in Feb
* Palladium climbs to highest price since March 2015
(Updates prices, adds comments, NEW YORK dateline)
By Devika Krishna Kumar and Eric Onstad
NEW YORK/LONDON, March 23 Gold slipped on
Thursday as the dollar firmed, while palladium extended gains to
hit a two-year high on economic data and demand from the
Spot gold was down 0.3 percent at $1,245.26 an ounce
by 2:21 p.m. EDT (1821 GMT), retreating from an intraday peak of
$1,253.12, its highest since Feb. 28.
U.S. gold futures shed 0.3 percent to $1,246.60.
"The dollar has been a little bit stronger today, interest
rates climbed up a touch and the stock market finally gave a
positive performance prior to tonight's vote on healthcare - all
of which means gold traders have pulled back a little," said
George Gero, managing director at RBC Wealth Management.
The dollar index , which measures the greenback
against a basket of currencies, was slightly firmer at 99.769.
It had dropped to its lowest in nearly seven weeks at 99.547 on
U.S. stocks rose slightly on Thursday, with gains limited by
signs that President Donald Trump was struggling to get enough
votes to pass a healthcare bill in Congress, while European
shares rose on bank borrowing and oil prices slipped.
The immediate focus is on whether Trump can gather enough
support to pass a bill to roll back Obamacare, representing a
major test of his legislative ability and whether he can keep
his promises to business.
A rough ride for the healthcare plan could affect Trump's
efforts to cut taxes and boost infrastructure, with the
potential to drive more investors to gold as a safe haven if
stock markets fall, analysts and traders said.
The dollar briefly slipped on Thursday after U.S. jobless
claims rose unexpectedly, sending gold temporarily higher.
But the dollar rebounded after the market realized that
jobless levels remained below a level associated with a
strengthening labor market. The greenback added gains on news
that February U.S. new homes sales hit a seven-month high.
From a technical standpoint, gold's almost "V-shaped
recovery" from the key $1,200 handle suggests more gains are
likely, analysts said.
Palladium climbed to a peak of $808.70, its highest
since March 10, 2015, before paring gains to $799.60 for a rise
of 1.7 percent.
"Palladium has a completely different dynamic" to other
precious metals, said ABN Amro commodities strategist Georgette
Boele in Amsterdam. "It is far more related to economic data
releases, the expectations for the economy, both emerging and
The European Central Bank said on Thursday that economic
recovery in the euro zone was gaining ground while data last
week indicated strong U.S. factory output, a rebound in U.S.
consumer sentiment and a rise in European car sales in February.
"Palladium has been very exciting now for weeks and I think
it's been doing very well with additional demand coming from the
need for other vehicles besides gasoline," Gero said.
Palladium is mainly used in catalytic converters that curb
pollution from vehicle exhausts.
Spot silver rose 0.3 percent to $17.56, while
platinum advanced 0.3 percent to $962.40.
(Additional reporting by Nallur Sethuraman in Bengaluru;
Editing by Ruth Pitchford and Richard Chang)