By Clara Denina
LONDON (Reuters) - Gold rebounded on Friday before a meeting of euro zone finance ministers that could put Greece on its way to exiting the bloc, but prices were still headed for their fourth straight weekly drop.
Spot gold, lower initially, was up 0.3 percent at $1,211.60 an ounce by 1456 GMT. The metal has lost 1.6 percent so far this week, dipping to its lowest in six weeks at $1,197.56 on Wednesday, when hopes for a successful resolution to Greece's debt talks boosted investor appetite for risk.
U.S. gold futures for April delivery were up $3.70 an ounce to $1,210.80 on the day.
The dollar rose against the euro after German news magazine Der Spiegel reported that European Central Bank officials are preparing for a departure of Greece from the euro zone.
The start of the emergency meeting of the 19-nation Eurogroup in Brussels was postponed until 1530 GMT.
Greece's new prime minister said he was certain euro zone finance ministers would accept Athens' request as EU paymaster Germany softened its hostile tone.
Eurozone officials are about to start the meeting and gold prices will react anything that comes out of that, Natixis analyst Bernard Dahdah said.
"That could impact prices in the immediate term but ultimately, it will be gold's inverse relationship with the dollar that will prevail."
Traders were set to focus on the U.S. Federal Reserve and its monetary policy for clues on a possible interest rates hike by June, despite caution evident in the minutes from the latest Fed policy meeting.
Any hike by the Fed, which has kept rates near zero since 2008 to stimulate the U.S. economy, could hurt demand for non-interest-bearing bullion.
Liquidity was thin in Asia as No.2 consumer China and several other Asian countries were shut for the Lunar New Year holiday.
Gold prices had received some support from Chinese buying ahead of the holiday, when gold is bought for gift-giving.
"A lot hinges on the return of China next Wednesday as many participants are expecting them to be on the bid following their New Year festivities," MKS Group said in a note.
"If this fails to be the case, the complex would likely continue its slide lower."
Silver rose 0.3 percent to $16.39 an ounce, while platinum dropped 0.4 percent to $1,161.00 an ounce, after reaching a 5-1/2 year low at $1,151.40 earlier. Palladium fell 0.9 percent to $776.65 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Ruth Pitchford and David Evans)
