LONDON: Gold fell to two-week lows on Friday, heading for its first weekly drop in three as upbeat US economic data lifted the dollar, raising anxiety over the Fed's future course. The metal was headed for a 2.7 percent weekly drop as expectations the US Federal Reserve will maintain its economic stimulus seem to be now factored in. Spot gold was down 0.6 percent to $1,314.71 an ounce by 1059 GMT after Thursday's 1.4 percent slide. It earlier fell to a lowest level since Oct. 22 at $1,313.89. Comex gold futures for December fell $8.80 to $1,314.50 an ounce. The dollar rose to two-week highs after US data on Thursday showed the pace of business activity in the Midwest region rose more than expected in October and weekly jobless claims declined, soothing some worries about sluggish fourth-quarter growth. The US currency was also boosted by weakness in the euro after a plunge in euro zone inflation left markets suddenly eyeing the outside chance of a cut in interest rates by the European Central Bank soon. "The weakness we have been seeing in gold in the past two days is due to the after-effects of the FOMC statement and also the extremely low inflation rate in the euro zone," Commerzbank analyst Daniel Briesemann said. "These factors are very supportive of the dollar, which in turn weighed on precious metals prices." A stronger dollar makes dollar-denominated assets like gold more expensive for foreign investors.

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