Gold prices rise as Fed stance weakens dollar

BENGALURU, Jan 11 (Reuters): Gold prices climbed on Friday as the dollar retreated on expectations the Federal Reserve may pause interest rate hikes if the US economy slows this year, while investors awaited news on progress in the Sino-US trade talks.

Spot gold rose 0.6 per cent to $1,294.01 per ounce as at 0729 GMT, heading for a fourth straight weekly gain. The yellow metal is up 0.7 per cent so far this week.

US gold futures were up 0.5 per cent at $1,294.3 per ounce.

"The weaker dollar and a more dovish Fed are the two most alluring factors for gold," said Stephen Innes, APAC trading head at OANDA.

The dollar slipped against other major currencies, having rebounded on Thursday from three-month lows helped by Federal Reserve Chairman Jerome Powell's comment suggesting the central bank is not done tightening monetary policy just yet.

A partial US government shutdown extended into its 20th day and provided little comfort to the US currency, after President Donald Trump threatened on Thursday to use emergency powers to bypass US Congress to pay for a wall on the US-Mexico border.