* Gold down 1.2 pct for the week, still up 3.3 pct in Jan * Strong U.S. GDP data, weak Chinese demand bite * European shares sag, U.S. dollar up (Updates throughout, changes dateline from SINGAPORE) By Clara Denina LONDON, Jan 31 (Reuters) - Gold edged higher on Friday but was set to snap five weeks of gains, weighed down by strong U.S. economic growth, fears about the impact of the Federal Reserve's stimulus withdrawal and absent Chinese demand. Bullion gained across most of January to this week, underpinned by weakness in global equities gripped by concerns over emerging economies. But upbeat U.S. growth data reassured investors worried about capital outflows from emerging markets and validated the Fed's decision to stick to its tapering plan. The U.S. central bank this week reduced its bond purchases to $65 billion per month from $75 billion, as expected. Spot gold was up 0.2 percent at $1,245.30 an ounce by 1102 GMT, after a 2 percent overnight drop. U.S. gold futures for February delivery were up 0.3 percent at $1,245.70 an ounce. The metal was headed for a 1.2 percent loss on the week, after five straight weeks of gains. But January's early strength was enough to push gold to its first monthly increase in five, up more than 3 percent so far. The U.S. dollar index was flat on the day but remained close to a one-week high hit on Thursday. European shares opened lower as they struggled to shake off the difficulties that have spread from emerging markets. "You have strength of the dollar against emerging markets currencies and that's negative for gold," Quantitative Commodity Research owner Peter Fertig said. "But what is also important is the negative correlation between stock markets, especially the U.S. ones, and gold and the weakness in emerging markets," Fertig added. "Fears that it may lead to widespread crisis are currently sending shivers through the stock markets." The turmoil in emerging markets is, however, unlikely to derail the foundations of the global economic recovery, while the hawkish bias of the Fed remains in place, UBS said in a note. "That implies that any upside for gold should be short-lived ... for now, rallies in gold remain as selling opportunities," the bank said. CHINA HOLIDAY WEIGHS Gold was also missing the support of physical demand, as the world's number one buyer China has gone into a one-week break. "Near-term, gold fundamentals look bearish, as Chinese demand is sidelined for the next few weeks with the New Year holiday," ANZ said in a note. Chinese premiums had fallen to $4 just before the holiday from over $20 at the beginning of the month. Even when China comes back from the holiday, its purchases are not expected to be as strong as last year, when it imported a record 1,158 tonnes of gold. Among other precious metals, platinum was headed for a second straight weekly drop despite strikes at South African mines that have hit about 40 percent of global supply. South Africa's AMCU union rejected a 9 percent wage offer on Thursday from leading platinum producers, prolonging a week of industrial action. Meanwhile, the metalworkers union in South Africa said it would put down tools at a smelter of top platinum producer Anglo American Platinum from Feb. 5. Silver was headed for its biggest weekly drop since late November, but traded up 0.5 percent on the day at $19.22 an ounce. Palladium fell 0.3 percent to $702.60 an ounce.

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