Gold poised for worst weekly dip in four as dollar strengthens

SINGAPORE (Reuters) - Gold held steady just above $1,200 an ounce on Friday, remaining on course for its steepest weekly decline in four weeks as the dollar regained momentum, hurting the metal's safe-haven appeal.

Spot gold was little changed at $1,207.01 an ounce by 0048 GMT, after dropping 0.3 percent in the previous session.

The metal is down 1.4 percent for the week, its biggest drop since the week ended April 24.

The dollar has gained over 2 percent against a basket of major currencies this week, snapping a five-week losing streak, despite some losses on Thursday.

The greenback was boosted by weakness in the euro, which slipped after the European Central Bank indicated it would accelerate the pace of money printing to buy government bonds over the next two months. [USD/]

It was also supported by some signs of economic recovery, despite the Federal Reserve noting it was unlikely to hike rates at its next policy meeting in June.

Bullion also failed to react much to the Fed's minutes released this week, as that view was already widely held in the market following disappointing U.S. economic data over the past few weeks.

In fact, investor sentiment towards gold has turned bearish as prices have fallen from the three-month highs reached earlier this week.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, slid to their lowest in four months on Wednesday.

Data from Thomson Reuters' Lipper service showed on Thursday that investors in U.S.-based funds pulled $597 million out of funds that specialise commodities and precious metals in the week ended May 20, the biggest outflow since December 2013.

Elsewhere, South Africa's National Union of Mineworkers will push for an 84 percent rise in basic pay for entry-level gold mining workers, a near 10 percentage-point increase on previous demands, according to documents obtained by Reuters on Thursday.

The Chicago Mercantile Exchange is developing a European gold futures contract to serve customers in London, three sources familiar with matter said, which could present a direct challenge to London's traditional cash market.

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(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)