* China Q2 economy grows at slowest since 2009 * Gold investors focus on QE outlook, dollar * Spot gold may rebound to $1,581/oz -technicals * Coming up: U.S. PPI, June; 1230 GMT (Adds detail; updates prices) By Rujun Shen SINGAPORE, July 13 (Reuters) - Gold traded nearly flat on Friday, but remained on course for a second consecutive week of losses as worries about the euro zone debt crisis and the absence of stimulus measures in the United States buoyed the dollar and its safe haven appeal. Gold edged slightly higher right after China released its second-quarter growth data, which showed the world's second-largest economy grew at the slowest pace since early 2009 but may have stabilised. But it soon gave up its gains, as investors remain focused on the possibility of further monetary easing from the U.S. Federal Reserve, which seems remote for the time being. "The QE story is off the table now. Could it come back? Yes, it could, but the window of opportunity is closing and the latest they can do it is August," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore. "If we don't see any news, we will just grind lower." Gold could fall to $1,480 an ounce if it breaks its immediate support level at $1,520, he added. Spot gold was little changed at $1,570.65 an ounce by 0622 GMT, heading for a weekly decline of 0.8 percent. The U.S. gold futures contract for August delivery edged up 0.3 percent to $1,570.10. Spot gold could rebound to $1,581 an ounce during the day, said Reuters market analyst Wang Tao. The dollar index hovered near a two-year high hit in the previous session, on course for a second week of rises. It has lodged a 4-percent gain so far this year, compared to a 0.4-percent climb in spot gold over the same period. The dollar and U.S. Treasuries have outshone gold as the safe havens of choice among investors fleeing the risk posed by a slowdown in the global economy. A stronger dollar weighs on commodities priced in the greenback. The correlation between the dollar and gold stood at -0.67, showing the strongest inverse correlation since late April. A reading at -1 suggests a perfect inverse correlation in which one asset rise and the other falls. Schnider also said the lack of incremental gold purchases makes it difficult for gold to hold onto lofty price levels. "The market is in oversupply -- production growth is solid and we simply don't see incremental gold purchases," he said. China, the world's top gold producer, churned out 140.7 tonnes of gold in the first five months of 2012, up 6.6 percent on the year. In comparison, physical buying has been sluggish in recent months in Asia, home of the world's top two gold consumers China and India. Holdings of gold-backed exchange-traded funds dropped for the third straight session on Thursday to 70.4 million ounces, down 0.7 percent from a peak of 70.9 million ounces in March. Investors will be watching Italy's 5.25 billion euros bond auction later in the day after Moody's downgraded the country's government debt rating by two notches and warned it could cut it much further. Other precious metals with industrial applications, including silver, platinum and palladium, inched up after the China growth data, which fell within expectations, easing worries about deteriorating economic conditions. Precious metals prices 0622 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1570.65 0.16 +0.01 0.44 Spot Silver 27.21 0.06 +0.22 -1.73 Spot Platinum 1414.30 4.90 +0.35 1.53 Spot Palladium 576.75 3.22 +0.56 -11.61 COMEX GOLD AUG2 1570.10 4.80 +0.31 0.21 11083 COMEX SILVER SEP2 27.20 0.03 +0.13 -2.58 3592 Euro/Dollar 1.2198 Dollar/Yen 79.23 COMEX gold and silver contracts show the most active months

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