Gold set for 5th weekly fall on dollar rally, rate hike fears

Gold prices steadied on Friday, with bullion on course for a fifth straight weekly decline as a relentless surge in the dollar and fears of aggressive U.S. interest rate hikes weighed on demand.


* Spot gold inched up 0.1% to $1,711.26 per ounce by 0116 GMT. U.S. gold futures firmed 0.1% to $1,708.00.

* Gold prices are down 1.8% this week.

* The dollar was perched near 20-year highs, suppressing demand for greenback-priced bullion among buyers holding other currencies. A strong dollar sent gold down more than 2% in the previous session.

* However, the benchmark U.S. 10-year Treasury yield edged lower, slightly buoying zero-yield gold.

* Two of the Fed’s most hawkish policymakers on Thursday said they favoured another 75-basis-point interest rate increase at the U.S. central bank’s policy meeting this month, not the bigger rate hike traders had raced to price in after a report Wednesday showed inflation was accelerating.

* Higher interest rates raise the opportunity cost of holding non-yielding bullion.

* SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.28% to 1,016.89 tonnes on Thursday, from 1,019.79 tonnes on Wednesday.

* Spot silver was flat at $18.38 per ounce, but has fallen about 4.8% in what could be its seventh straight weekly loss.

* Platinum was little changed at $843.33. It has dropped about 6% this week, potentially its worst in at least three months.

* Palladium firmed 0.4% to $1,903.67. It has lost about 12.8% this week, the most since November.


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