By Clara Denina
LONDON (Reuters) - Gold fell on Friday and was set for its first weekly loss since May on improving global risk sentiment and a stronger dollar after better-than-expected U.S. data.
Wall Street opened slightly higher as June retail sales rose 0.6 percent in June, compared to an expected 0.1 percent rise. But European equities fell after an attack by a gunman at the wheel of a truck in the south of France killed at least 84 people.
Spot gold eased 0.6 percent to $1,327.30 an ounce by 1433 GMT. It fell to its lowest since June 30 in the previous session.
"In the short term, we can see some more pressure towards $1,300 as the focus is back on the U.S. after strong economic data, which increases the probability of a rate hike before the end of the year," Commerzbank analyst Carsten Fritsch said.
Higher U.S. rates tend to damage gold prices because they increase the opportunity cost of holding non-yielding bullion.
After six weeks of gains, the longest rally since March 2014, the metal has come under pressure this week, down 2.5 percent so far. It was hit by strong U.S. non-farm payrolls data and as uncertainty around the implications of Britain's Brexit vote eased with the formation of a new government.
U.S. gold fell 0.5 percent to $1,326 an ounce.
"Investors are taking profits, but $1,300 is now a floor for gold and that is going to hold moving forward," ING Bank senior strategist Hamza Khan said.
"Wider political issues such as the U.S. elections and then French and German elections next year are enough to support gold even though markets are rallying on the low interest rates environment and the quest for yields."
The dollar was set for its biggest weekly gain against the yen in 17 years and was up 0.4 percent versus a basket of six currencies, making gold more expensive to foreign holders.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.25 percent to 962.85 tonnes on Thursday.
Consumers in Asia took profits on their gold holdings as a price rally last week helped bullion hit its highest in more than two years, keeping new buyers at bay despite jewellers offering steep discounts in second-top consumer India.
Among other precious metals, spot palladium touched its highest since early November at $652 an ounce.
Spot silver was down 0.9 percent at $20.11 an ounce. It was marginally lower for the week, and near its first weekly loss in seven.
Spot platinum slipped 1.7 percent to $1,080.50.
(Additional reporting by Vijaykumar Vedala in Bengaluru; Editing by David Evans)
