By A. Ananthalakshmi
SINGAPORE (Reuters) - Gold eased on Friday and was likely to finish lower for a third week in four, as a resilient dollar and strong U.S. economic data undercut bullion's appeal as a hedge.
Spot gold shed 0.3 percent to $1,158.32 an ounce by 0329 GMT and is down 1.5 percent for the week. It has failed to recover strongly from a 4-1/2-year low of $1,131.85 hit last week, on steady outflows from gold-backed funds.
The dollar rose to a fresh seven-year high against the yen on Friday, bolstered by rising Japanese equities amid speculation that Japan's leader would call an election and delay a sales tax hike.
The greenback was holding close to a four-year high against a basket of major currencies.
"We are tracking the dollar-yen for now, and unless there is a sharp movement there, gold should hold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. Leung saw support for gold in the $1,150-80 range.
Strong U.S. data on Thursday also hurt gold. The number of new U.S. jobless claims rose last week but remained near a 14-year low, suggesting the U.S. labour market was moving toward full health.
A robust economy could prompt the U.S. Federal Reserve to soon raise interest rates, hurting non-interest-bearing gold.
The bearishness in bullion's outlook was reflected in holdings of SPDR Gold Trust, the world's top gold-backed exchange-traded fund.
The fund's holdings fell 0.3 percent to 720.62 tonnes on Thursday - an eighth straight day of declines and a six-year low. [GOL/ETF]
Traders were also closely tracking developments in No. 2 gold consumer India, where officials are considering curbs on imports.
Any new restrictions could raise local premiums against the global benchmark and hurt consumer demand. Reduced Indian gold buying would also pressure global prices, already smarting from weakening demand in China.
In news from the physical markets, consumers in Japan sold gold jewellery and bars as yen-priced bullion hit three-month highs and the Japanese currency slid, while buying interest elsewhere in Asia picked up.
(Editing by Richard Pullin and Muralikumar Anantharaman)
