TOKYO (REUTERS) - Gold held steady on Friday after nudging down 0.4 percent the previous day as the dollar climbed to its highest in nearly a year against the euro in the wake of more bad news for Greece. The precious metal held up on the view that investors in Europe will likely continue to favor gold while they worry about Greece's fiscal situation and the risks of ratings downgrades elsewhere in Europe. "Gold has its allure as a hedge against such sovereign credit risks, and such needs will stay high in Europe in particular for a while," said Koichiro Kamei, managing director at Japanese research firm Market Strategy Institute Inc. Greece's budget gap last year was worse than feared, the European Union's statistics office revealed on Thursday, and Moody's Investors Service downgraded its rating of Greek government debt. "We have yet to see if Greece is the last country to take a hit from a sovereign credit downgrade in the region," said Kamei. Spot gold was at $1,140.50 an ounce at 12:15 a.m. ET, basically unchanged from late New York trade. It was well above a Thursday low of $1,131.65, however, and is poised to rise 0.3 percent on the week. The euro fell to its lowest in a year on Friday, hammered by a wave of stop-loss selling in Asian trade as speculation heightened that Greece could default on its sovereign debt obligations. A stronger dollar usually leads to weakness in dollar-denominated gold as it is more costly to non-U.S. investors, and the metal is also seen as an alternative global currency to the U.S. dollar. On Thursday, Finance Ministers from the Group of Seven rich nations spent most of the time discussing Greece, Japan's Finance Minister Naoto Kan said after their meeting in Washington. Europe asked the United States and Japan for a show of support on Greece, but G7 finance ministers did not discuss China's yuan currency, Kan said. U.S. gold futures for June delivery were down 0.2 percent at $1,141.10 per ounce compared to the settlement on the COMEX division of the NYMEX of $1,142.90. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,140.128 metric tons as of April 22, down 0.913 metric ton or 0.08 percent from the previous day. The holdings hit a record high of 1,141.041 metric tons on April 9 and stayed at that level until Wednesday. Among other precious metals, spot palladium edged down to $560.50 an ounce compared with $561 in New York late on Thursday, when it hit a two-year high of $569. Spot platinum fell to $1,736 an ounce from $1,740. On Thursday it reached a high of $1,751.50, its highest since mid-2008.

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