Gold set for seventh weekly gain as dollar sags

LONDON, Apr 29 (Reuters): Gold steadied Friday, just shy of fresh record highs and set for its seventh successive weekly gain, driven largely by the decline in the dollar to its lowest in nearly three years. The dollar fell to its lowest since July 2008 against a basket of major currencies, after data this week painted a picture of an economy with slower growth and higher inflation, and after the Federal Reserve signaled it would not tighten monetary policy any time soon. An environment of low interest rates, a weak dollar and accelerating price pressures is usually positive for gold, which becomes cheaper to non-US investors and can help insulate a portfolio against inflation. Gold's inverse correlation to the US dollar makes it cheaper for non-US investors and means it draws more strength from weakness in the greenback. Highlighting gold's dependence on the dollar is the tepid performance of the metal versus other major currencies such as the euro, against which it has barely moved this week. Spot gold was last up 0.1 per cent at $1,536.30 an ounce by 1055 GMT, on course for a 1.8 per cent gain this week, when it hit a record $1,538.35. Trading volumes were restricted by a public holiday in London.