* Spot gold on track for weakest week since March
* Holdings of No. 1 gold ETF hit near 7-year low
* GRAPHIC-Asset returns: http://link.reuters.com/dub25t
* COMING UP: U.S. Federal Reserve meeting July 28-29 (Updates prices; adds comment, second byline, NEW YORK dateline)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, July 24 (Reuters) - Gold turned higher after sliding more than 1 percent to its lowest since early 2010 on Friday, as the dollar fell from its highs and U.S. stocks extended losses, but the precious metal was on track to see the biggest weekly decline since March.
Spot gold XAU= hit the lowest since February 2010 at $1,077.00 an ounce but was up 0.5 percent at $1,096.29 at 2:47 p.m. EDT (1847 GMT). U.S. gold futures GCv1 for August delivery settled down 0.8 percent at $1,085.50 an ounce.
"We had an excessive slide in the equity markets. We saw the dollar give up some of its earlier gains," said David Meger, director of metals trading for High Ridge Futures in Chicago, explaining reasons for the late-day bounce.
Prices have been under pressure since tumbling more than 3 percent in Asian trading hours on Monday in their biggest one-day drop in nearly two years, a selloff accompanied by heavy trading volumes in New York and Shanghai.
Gold has been hurt this year by expectations that the Federal Reserve is on track to raise interest rates for the first time in nearly a decade, boosting the opportunity cost of holding non-yielding bullion while lifting the dollar.
The Fed will hold its next meeting July 28-29.
"In the short term, investor sentiment is what actually moves prices," Capital Economics analyst Simona Gambarini said. "It's now likely that the Fed will hike rates this year, most likely in September ... (and) investors are already showing that in their positioning. They're becoming more bearish on gold."
The U.S. dollar .DXY pared gains against a basket of major currencies, while the euro EUR= fell on downbeat German and euro zone data. U.S. stocks extended losses late in the day. FRX/ .N
As gold prices slumped this week, holdings of the world's biggest gold-backed exchange-traded fund, the SPDR Gold Trust GLD , fell for a sixth day on Thursday to 684.6 tonnes, the lowest since September 2008. The fund is on track for its biggest weekly outflow since early May. GOL/ETF
Physical demand in Asia remained lackluster amid modest premiums in top gold consumers India and China. ID:nL3N1032YR ID:nL3N10135T
Gold is expected to struggle for the rest of this year, though platinum is expected to fight back, a Reuters poll showed on Friday. PREC/POLL
Silver XAG= was down 0.2 percent at $14.62 an ounce, while palladium XPT= was up 1.1 percent at $621.5o an ounce and platinum XPT= up 0.6 percent at $981.74.