Gold eases as dollar firms, but set for best week since June

By A. Ananthalakshmi

SINGAPORE (Reuters) - Gold slipped on Friday as the dollar rose after robust U.S. economic data but the metal was on track for its biggest weekly climb since June following gains earlier in the week from safe-haven demand.

Spot gold had eased 0.2 percent to $1,224.90 an ounce by 0337 GMT. The metal has risen 2.8 percent this week, although it failed to build on strong gains that took it to a seven-week high on Wednesday.

"The 100-day moving average at $1,234 is providing stern resistance. The level has been tested three times now and on each occasion has capped the market," said Jason Cerisola, a metals dealer at MKS Group.

"If it can be breached, the next level to watch is the 200-day moving average, which comes in around $1,267."

Bullion's weakness on Friday came as the dollar rose against most other major currencies, thanks in part to U.S. retail sales data that provided fresh evidence of momentum in the economy.

Strength in the economy and the greenback dulls the appeal of gold, often seen as a hedge. Higher equities also hurt bullion.

Movements in the energy markets were also being watched by bullion investors as weaker oil prices could limit demand for gold, an inflation hedge.

U.S. crude dropped more than $1 to a fresh 5-1/2-year low below $59 a barrel in early Asian trade on Friday, extending losses due to continuing concern about a supply glut and a bearish demand outlook. [O/R]

Earlier in the week, gold had gained as global equities and the dollar tumbled on global growth concerns and political uncertainty in Greece, plus some profit-taking. The metal climbed to a seven-week high of $1,238.20.

An improvement in sentiment was seen in the holdings of the world's top gold-backed exchange-traded fund, SPDR Gold Trust.

The fund's holdings rose 0.13 percent to 725.75 tonnes on Thursday, the third straight day of inflows.

"The longer gold holds above $1,200, the more it may attract fresh buying and gold ETFs may begin to build," HSBC analysts said in a note.

"The oil decline has tended to be negative for bullion but should oil prices move below $60 and the broader financial markets become worried about the impact of lower energy prices globally, then gold may receive some safe-haven-inspired buying," they said.

(Reporting by A. Ananthalakshmi; Editing by Joseph Radford and Alan Raybould)