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PRECIOUS-Gold prices inch down on firmer dollar

Feb 23 (Reuters) - Gold prices slipped on Friday on a stronger dollar and the yellow metal was on track for its sharpest weekly drop in 2-1/2 months.

FUNDAMENTALS

* Spot gold was down 0.2 percent at $1,329.16 an ounce at 0127 GMT. Prices gained 0.6 percent in the previous session, in their biggest one-day percentage rise since Feb. 14.

* The precious metal was on track for its biggest weekly fall since the week ended Dec. 8, 2017.

* U.S. gold futures were down 0.2 percent at $1,330.9 per ounce.

* The dollar index , which measures the greenback against a basket of currencies, was up 0.1 percent at 89.809.

* The index had reached a 10-day high of 90.235 on Thursday, from a three-year low of 88.253 late last week, before its rally ran out of steam. It was on still on track to gain 0.8 percent on the week.

* Dallas Federal Reserve Bank President Robert Kaplan said on Thursday that three U.S. interest-rate increases in 2018 is "appropriate" but that stronger-than-expected economic data could change that.

* U.S. Treasuries pared price gains on Thursday after the U.S. government sold new seven-year notes to slightly soft demand, the final sale of $258 billion in debt this week.

* The number of Americans filing for unemployment benefits fell to a near 45-year low last week, pointing to strong job growth in February and solid momentum in the economy.

* The European Union has been urged by its presidency to ease proposed new regulations on foreign banks within the block to bring them in line with U.S. requirements, EU documents showed on Thursday.

* Japan's core consumer inflation was steady in January from a year earlier in a sign a strengthening economy has yet to prompt companies to raise prices, a challenge policy makers have yet to overcome despite years of massive stimulus.

* European Central Bank policymakers meeting last month rejected even a token change in the bank's policy message, arguing that it was premature to signal policy normalization given weak inflation, the minutes of the meeting showed on Thursday.

* Euro zone government bond yields dipped on Thursday after a survey showed German business confidence fell in February, offsetting an earlier rise in yields after the minutes of the last Federal Reserve meeting revived fears of inflation.

* Barrick Gold on Thursday predicted lower gold

production over the next decade, risking its rank as the world's biggest bullion producer, but executives insisted they will not make acquisitions simply to sate a call for growth.

DATA AHEAD (In GMT)

0700 Germany Detailed GDP Q4 1000 Euro zone Inflation final Jan

(Reporting by Eileen Soreng in Bengaluru; Editing by Subhranshu Sahu)