SINGAPORE - Gold dropped on Thursday after volatile trade the previous day, when the metal rallied to its highest in more than a week before erasing the gains, due to a larger-than-expected fall in U.S. producer prices. FUNDAMENTALS · Spot gold was at $1,121.75 an ounce by 0029 GMT, down $2.30 from New York’s notional close on Wednesday, when it hit an intraday high of $1,132.80 to track early gains in the euro versus the dollar before falling sharply. · U.S. gold futures for April delivery fell $2.2 an ounce to $1,122. · The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,115.511 tonnes as of March 17, unchanged from the previous business day. MARKET NEWS · Oil rose more than 1 percent to end near $83 a barrel on Wednesday after a U.S. government report showed increased oil product demand and as OPEC decided to leave output targets unchanged. · The dollar fell against higher-yielding currencies such as the Australian dollar on Wednesday as the Federal Reserve’s commitment to low interest rates prompted investors to seek higher returns elsewhere. · U.S. stocks gained on Wednesday, pushing the Dow to a 17-month high, after a benign February inflation reading supported the Federal Reserve’s renewed pledge of low interest rates.

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