* Silver on track to post biggest weekly rise in 6 weeks
* Platinum, palladium headed for weekly gains
(Updates throughout, changes dateline from SINGAPORE)
By Clara Denina
LONDON, April 15 (Reuters) - Gold edged up on Friday
following three days of declines, but was heading for its first
weekly drop in three as a stronger dollar and higher equities
kept investor interest in check.
Bullion climbed to a three-week high on Tuesday, only to
give up gains as world stocks rose to their highest levels since
late December on Thursday, boosted by robust Chinese economic
data and a surge in oil prices earlier this week.
Spot gold XAU= was up 0.2 percent at $1,229.06 an ounce by
0941 GMT, following a drop of 1.3 percent in the previous
session. It was heading for a 1 percent loss for the week.
Gold prices have steadied after posting their biggest
quarterly rise in nearly 30 years in the three months to March,
driven by a reining in of expectations that the U.S. Federal
Reserve will push ahead with several rate hikes this year.
"We are seeing central banks having separation anxiety with
their stimulus policies and so much stimulus tends to devalue
currencies and that's the follow through from negative real
rates," ETF Securities analyst Martin Arnold said.
"It is a cost for people to hold cash and fixed income and
it devalue fiat currencies, so people are still turning to
gold."
Higher interest rates would lift the opportunity cost of
holding non-yielding assets, while boosting the dollar.
Atlanta Federal Reserve Bank President Dennis Lockhart on
Thursday said he no longer expects to advocate for a U.S.
interest rate hike in April, but added there is still time for
two or three rate hikes this year.
The Fed will raise interest rates twice this year, most
likely in June, but the probability has faded on signs of a weak
start to the year, inflation that is still tame and a brittle
global backdrop, a Reuters poll showed.
Bullion-backed exchange-traded funds have seen outflows in
recent days, weighing on gold prices.
Assets in SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, fell to 806.82 tonnes on
Thursday, the lowest in a month.
Among other precious metals, silver XAG= was on track to
post a 5 percent weekly gain, its biggest jump in six weeks. It
was up 0.3 percent at $16.19 an ounce, after hitting its highest
level since October earlier this week.
Platinum XPT= was headed for its third straight weekly
gain, but was down 0.6 percent at $983.50 an ounce, while
palladium XPD= fell 0.3 percent at $559.40 but was poised for
its best week in six with a 4.5 percent rise.
European car sales rose 5.7 percent in March, industry data
showed on Friday, helped by discounts and other incentives.
Platinum and palladium are used in autocatalysts to clean up
exhaust emissions.