* Gold extends post-U.S. election slide towards $1,200/oz
* Holdings of largest gold ETF hit lowest since June
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates throughout, adds LONDON dateline)
By Jan Harvey
LONDON, Nov 18 (Reuters) - Gold hit its lowest level since late May on Friday as the dollar surged to a near 14-year high on expectations for a U.S. rate hike next month and more infrastructire spending from the new Trump administration.
The U.S. currency is on track for its best fortnight since 1988 versus the yen, having hit its highest since early 2003 versus a currency basket as Donald Trump's presidential win stoked talk of higher fiscal spending and tax cuts to jump-start the U.S. economy.
That weighed on gold, which is priced in dollars.
Spot gold XAU= slid to its lowest since May 30 at $1,203.52 an ounce, and was down 0.8 percent at $1,205.76 an ounce.
U.S. gold futures GCv1 for December delivery were down $11.90 an ounce at $1,205.00, off a low of $1,201.30, its weakest since mid February.
"It's all about expectations, and what markets expect is a large fiscal stimulus, mostly infrastructure spending, and for the Federal Reserve to be much more aggressive in hiking rates," Capital Economics analyst Simona Gambarini said.
"That's what's being reflected in the (gold) price."
Spot prices have fallen nearly 2 percent this week and are more than $130 an ounce down from their post-election peak, hurt by the jump in the dollar and a surge in U.S. Treasury yields.
U.S. bond yields were set for the biggest fortnightly rise in 15 years on Friday on bets U.S. inflation and interest rates are headed higher. That increased the opportunity cost of holding non-yielding bullion. MKTS/GLOB
Fed chair Janet Yellen said on Thursday in congressional testimony that Trump's election has done nothing to change the Fed's plans for a rate increase "relatively soon". of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares GLD , fell another 5.6 tonnes on Thursday to their lowest since June. Holdings have fallen nearly 30 tonnes since the U.S. election. GOL/ETF
"With the pressure that has been seen in gold prices since early November, total ETF holdings in gold have fallen to their lowest level since early July 2016," ING said in a note. "Further outflows could put further pressure on gold prices."
Silver XAG= was down 1.1 percent at $16.47 an ounce, having earlier touched its lowest since June 8 at $16.44, while platinum XPT= was 0.5 percent lower at $925.80. Both metals were set for a second consecutive weekly decline.
Palladium XPD= was down 1.9 percent at $713 an ounce, but was set to post a third weekly rise, of more than 6 percent. The metal has benefited from strength in industrial metals, on hopes that higher U.S. infrastructure spending could boost demand.