* Equity markets rally on economic growth signs
* Gold prices head for biggest annual drop since 1981
* Premiums inch up in Hong Kong, steady in Singapore (Updates prices)
By Clara Denina
LONDON, Dec 27 Gold edged up on Friday, supported by some physical buying, but remained on track for its biggest annual loss in three decades as rallies in equities and prospects of global economic recovery dented its appeal.
Expectations that the U.S. economy can stand on its own as monetary stimulus is withdrawn were buoyed by data on Thursday showing a decrease in weekly jobless claims.
U.S. equities ended little changed on Friday, but the Dow and S&P 500 wrapped up a second straight week of solid gains. U.S. Treasury yields hit their highest since July 2011 above 3 percent.
Gold was up 0.19 percent to $1,213.45 at 4:40 p.m. (2140 GMT), while U.S. gold futures for February delivery settled up 0.1 percent at $1,214.00 an ounce.
"The market is probably going to stay in wide ranges for the next few sessions and there will still be some support from Asian buyers ahead of the Chinese New Year at the end of January," VTB Capital analyst Andrey Kryuchenkov said.
Thin volumes may increase volatility until investors return from holidays.
"I think they will liquidate again into this price rebound as there is no fundamental reason to buy the metal," he said.
Bullion fell to a six-month low of $1,185.10 last week, after the U.S. Federal Reserve said it would begin tapering its $85 billion in monthly bond purchases next month, before recovering slightly.
BIGGEST ANNUAL DECLINE IN 32 YEARS
Gold is headed for a near 30 percent slump in 2013, ending a 12-year rally prompted by rock-bottom interest rates and measures taken by global central banks to prop up the economy, which encouraged investors to put their money in non-interest-bearing assets such as gold.
This year's decline is set to be gold's biggest since 1981, while current prices are 37 percent below an all-time high of $1,920.30 hit in 2011.
As a gauge of investor interest, holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.19 percent on Thursday to 804.22 tonnes, the weakest since 2009.
Physical buying among Chinese consumers edged up on Friday, but demand from Indonesia and Thailand has eased in recent weeks due to their weak currencies.
Premiums for gold bars inched up to a high of $2 an ounce above spot London prices in Hong Kong, from $1.50 last week, as dealers awaited the arrival of fresh supply from Europe next month.
An improving global economic outlook helped platinum and palladium stage a year-end rally.
After rising the most since mid-October in the previous session, spot platinum hit a two-week high of $1,377 an ounce. It pared gains due to technical selling and closed up 1.2 percent at $1,371.50 an ounce.
Spot palladium rose to $714 an ounce, its highest since Dec. 17, and closed up 1.5 percent to $707.75 an ounce, its biggest daily gain since Dec. 4.
In other precious metals, silver was up 1.6 percent to $20.03 an ounce, having posted its biggest daily gain for two weeks, on Thursday. Silver is down 35 percent this year in its worst annual performance since at least 1982. (Additional reporting by Lewa Pardomuan in Singapore and Josephine Mason in New York; Editing by Jason Neely, Anthony Barker, Dale Hudson and Kenneth Barry)