Spot gold lost 0.4 percent on Friday, on course for its first weekly drop after seven straight weeks of gains, as investors awaited a speech by U.S. Federal Reserve Chairman Ben Bernanke later in the day.

All eyes are on Bernanke's speech in Jackson Hole scheduled for 1400 GMT, with markets eager to hear what the Fed's plan is to help a struggling U.S. economy, although the growing consensus is that the Fed's options to stimulate the economy are limited.

Spot gold declined 0.4 percent to $1,762.29 by 0218 GMT after a 1.1 percent rise on Thursday. It was on course for a 4.8-percent decline on the week, its sharpest weekly fall since week ended March 1, 2009.

U.S. gold traded nearly flat at $1,764.30.

There is not a clear conviction on price direction as everyone is waiting for Jackson Hole, said Chen Xin Yi, an analyst at Barclays Capital, adding that some investors were exiting the market ahead of the central bankers' meeting and upcoming long weekend in London.

Some people could be liquidating positions pre-emptively in case there was a risk rally after the meeting.

London markets will be closed on Monday for Summer Bank Holiday.

Disappointment in Jackson Hole could spur another safe-haven rally for assets like gold which has just lost more than $100 from Tuesday's record high of $1,911.46.

Persistent worries over the euro zone debt crisis should buoy gold. Germany's DAX <.GDAXI> dropped as much as 4 percent on rumors the country could enact a short-selling ban following the example of other European nations.

A German Finance Ministry spokesman however told Reuters they were not planning a general short-selling ban.

Holdings in the SPDR Gold Trust remained unchanged at 1,232.314 metric tons, while holdings in the iShares Silver Trust dropped more than 1 percent to 9,705.90 metric tons.

Spot silver lost 0.7 percent to $40.70 an ounce, but was still up from a 1- week low of $38.73 hit in the previous session. It was headed for a 5 percent weekly drop, after gaining in the last two consecutive weeks.

Spot platinum was little changed at $1,812.74 an ounce. The platinum-gold spread rose above $50, up from a discount of $30 earlier this month.

Japanese investors have been steadily boosting their platinum investments over the last month, tempted by the precious metal's stability relative to gold as they look to diversify their commodity holdings with global markets in turmoil.

(Editing by Himani Sarkar)