* Palladium on track for third consecutive weekly gain
* Platinum sees best week since early January
* Dollar set for biggest weekly fall in a month
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl
By Arijit Bose
Feb 22 (Reuters) - Gold rose on Friday en route to a second weekly gain as the dollar was subdued by weak U.S. economic data and hopes of a breakthrough in the U.S.-China trade dispute, with a darkening global economic outlook bolstering interest in bullion.
Spot gold XAU= was up 0.5 percent at $1,329.42 per ounce by 1603 GMT, or higher by about 0.6 percent thus far this week.
U.S. gold futures GCcv1 were down 0.3 percent at $1,331.70 per ounce.
The metal had fallen about 1 percent on Thursday following the release of minutes from the U.S. Federal Reserve's last policy meeting, which painted a less dovish picture than expected. should be doing a little better, because there are possibilities of a trade deal, which would mean the dollar could weaken; the U.S. economy is also slowing quite markedly, that should keep interest rates fairly dormant," INTL FCStone analyst Edward Meir said.
Higher rates reduce investor interest in non-yielding bullion.
The dollar index .DXY , though little changed versus six other major currencies on Friday, was set for its biggest weekly fall in a month, bolstering the appeal of gold.
The U.S. currency, which has been a refuge for investors during the U.S.-China trade dispute, has come under pressure on signs of a breakthrough in talks. USD/ helping the case for gold, new orders for U.S.-made capital goods unexpectedly fell in December, reviving some market expectations that the Fed would halt its 2019 rate-increase cycle. news added to concerns about a slowdown in Europe and China, which analysts said have prompted increasing interest in gold, considered a safe haven in times of economic and political uncertainty. holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, dropped 0.6 percent to 789.51 tonnes on Thursday. analyst Bernard Dahdah said the slight pullback did not signal a shift by gold investors since the levels were still close to highs recorded at the start of 2019.
Elsewhere, palladium XPD= gained 1.5 percent to $1,480.17 per ounce, having topped the psychologically significant $1,500 level for the first time on Feb. 20.
The autocatalyst metal was on track for a third straight week of gains, up about 4.2 percent.
Platinum XPT= rose 2.2 percent to $837, and was set for its best week since early November 2018. Silver XAG= was up 0.7 percent to $15.93, poised to snap two weekly losses.
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