* China economy growth quickens, inflation eases * Physical demand supports gold; silver ETF sees outflow * Coming up: U.S. initial claims, weekly; 1330 GMT (Updates prices) By Amanda Cooper LONDON, Jan 20 (Reuters) - Gold eased on Thursday, following three days of gains, and ignored a recovery in the euro as investment demand waned, although Asian consumer buying prevented the price from sliding too far. Platinum meanwhile fell after two consecutive days of rallies that took the price to its highest since July 2008. Chinese inflation data showed that price pressures were growing more than expected and could prompt the government to step up its approach to tightening monetary policy, thereby eroding gains in industrial commodities and equities. Spot gold XAU= fell 0.54 percent to $1,363.55 an ounce by 1155 GMT, but was still on track for a 0.3 percent gain this week, its first weekly rise in three weeks. U.S. February gold futures GCG1 were down 0.5 percent at $1,363.10. Anticipation of rising price pressure in China has in turn encouraged local investors to buy gold as a hedge against inflation, even as investor demand, as reflected by outflows of metal from major exchange-traded funds, continued to wane. "Gold is also reacting to FX market moves, the euro has come off a bit from its little spurt up this week," said Credit Suisse analyst Tom Kendall. "Inflation is an emerging market story at the minute and I think it does play into gold and for demand for physical gold throughout the Asian region." Premiums for gold bars in Asia are holding around their highest for two years as consumers stock up ahead of the Chinese Lunar New Year in February. [GOL/AS] Chinese growth soared past expectations in the final quarter of last year, while inflation slowed less than expected. Beijing expected inflation pressure to remain high in the first quarter due to imported inflation. [ID:nBJA002431] INFLATION HEDGE Aside from its role as an alternative to currencies, stocks or bonds, gold is often perceived as a hedge against rising inflation risks, in that it maintains its value even as price pressures erode that of other assets. The euro EUR= edged up against the dollar as investors hoped for progress on finding a sustainable way to ease the debt crisis in the euro zone. [FRX/] While in theory, a weaker dollar would boost gold, the metal's negative correlation to the U.S. currency reached its weakest since late December on Thursday. Holdings in the SPDR Gold Trust (GLD), the world's largest gold-backed exchange-traded fund, continued to decline. It fell to 1,251.433 tonnes by Jan 19, its lowest since May 2010. "Buying from the physical side is supporting the market for the time being," said Ronald Leung, a physical dealer at Lee Cheong Gold Dealers based in Hong Kong. "But the unwinding of ETF positions is pressuring gold prices. In the short term, gold is probably going to trade in the range between $1,350 and $1,400." Silver, which rose by more than 80 percent in price last year due largely to continuous investment, also came under pressure following another outflow of metal from top silver ETF iShares Silver Trust (SLV). Holdings fell to 10,575.32 tonnes, their lowest in over two months. Spot silver XAG= was last down 1.1 percent at $28.46 an ounce, having lost more than 7.5 percent in January, putting it on track for its largest monthly slide since December 2009.

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