* Higher Asia demand helps gold end week higher
* SPDR Gold holdings rise 0.3 pct Thursday
* Palladium touches more than three-month lows
(Updates prices, adds quote, weekly milestones, adds NEW YORK
dateline)
By Devika Krishna Kumar and Zandi Shabalala
NEW YORK/ISTANBUL, Oct 21 (Reuters) - Gold prices were
little changed on Friday as a strong dollar limited gains, but
the precious metal notched its first weekly rise in four as
seasonal demand from Asia kicked in.
Demand from Asia, including China, India and exchange-traded
funds (ETF), has helped prop up prices this week.
Spot gold was up 0.1 percent at $1,267.23 an ounce by
2:57 p.m. EDT (1857 GMT). For the week, prices rose 1.4 percent,
clawing back part of the 6.6 percent shed over the last three
weeks.
U.S. gold futures ended the session up 0.02 percent
at $1,267.70.
Demand from India is expected to remain elevated as
festivals, including Dhanteras and Diwali, will be celebrated at
the end of the month - two of the most important Hindu festivals
and a time when gold is traditionally given as a gift,
Commerzbank analysts said.
However, the dollar index, which measures the
greenback against a basket of currencies, was up 0.4 percent at
98.734 after touching its highest since February on Friday.
Bullion has been hurt in recent weeks by the strength of
the dollar, which has been helped by a slew of data indicating
an improvement in the U.S. economy that could justify an
interest rate rise later this year.
Higher U.S. interest rates increase the opportunity cost of
holding non-yielding assets such as bullion and create a flight
to investments that may offer higher returns.
"The market right now, and for the rest of the year, is
still focused on the U.S. interest rate hike. We mostly know
it's likely to happen but we are looking at the economic signals
ahead of it," Natixis precious metals analyst Bernard Dahdah
said.
Holdings of the SPDR Gold Trust, the world's largest
gold-backed ETF, rose 0.31 percent to 970.18 tonnes on Thursday.
SPDR holdings have risen 2.3 percent so far this month.
MKS PAMP Group said in a note that ETF inflows continued to
support gold. "However, dollar strength is likely to weigh upon
moves higher over the short term amid euro and pound weakness."
The euro hit a seven-month low against the dollar after the
European Central Bank poured water on a tapering of its
asset-buying program, keeping the door open for more stimulus
this year.
Silver rose 0.1 percent to $17.53 while platinum
was down 0.1 percent at $932.8 an ounce. Palladium
fell 1.6 percent to $619.22 after dipping to its lowest since
July 12.
(Additional reporting by Nallur Sethuraman in Bengaluru;
Editing by David Clarke and Dan Grebler)