Gold poised for weekly loss on strong U.S. data, dollar

SINGAPORE (Reuters) - Gold dipped for a third session on Friday and was headed for a weekly loss as a firmer U.S. dollar and robust economic data dented the metal's appeal as a hedge.

FUNDAMENTALS

* Spot gold eased 0.1 percent to $1,230.48 an ounce by 0020 GMT, after slipping over 1 percent in the previous two sessions.

* The metal is headed for a weekly loss of 0.6 percent - its first drop in three weeks - as the dollar gained after two weekly declines in a row.

* Palladium was the best performer among precious metals for the week, with a near 4 percent jump.

* The dollar rallied on Thursday as investors plowed cash back into riskier asset classes, underpinned by promising U.S. data and stronger-than-expected manufacturing reports in Europe and China.

* A strong greenback makes gold more expensive for holders of other currencies.

* Data on Thursday showed that new claims for U.S. unemployment benefits held below 300,000 for a sixth straight week last week, suggesting the labour market was shrugging off jitters over a slowing global economy.

* Euro zone businesses performed much better than forecasters expected this month and China's vast factory sector grew a shade faster, but U.S. manufacturing activity sputtered to its slowest since July, underscoring the uneven nature of the post-crisis global economy.

* The data, however, still managed to calm investor nerves after fears of a global slowdown prompted a sharp sell-off in global equities and the dollar, dimming gold's appeal as a safe-haven.

* In news from the miners, Peruvian precious metals miner Hochschild posted a decline in third-quarter production, hit by lower grades at its Pallancata mine and a two-week strike at its Arcata asset, but said it was still on track to reach its annual target.

* African Barrick Gold Plc tightened its costs target for the full year as it increased output while also cutting jobs to beat the sharp drop in gold prices.

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin)