SINGAPORE, Jan 2 (Reuters): Gold inched up on Friday as higher oil prices boosted its safe-haven appeal, but the metal looked set to post its third straight weekly loss, weighed down by a strong dollar.
Bullion ended 2014 down nearly 2 per cent, following a 28 per cent slump the previous year, as its investment appeal tapered amid better-performing equities.
Many analysts expect another tough year for gold, with the dollar expected to gain further on expectations of higher US interest rates and a recovering economy.
"We think it is likely that gold may test $1,000 in 2015, but thereafter we expect a rebound in prices as investors may rush in to buy the precious metal on dips," said Howie Lee, analyst at Phillip Futures, in a note this week.
A stronger dollar, global deflationary pressures, slowing Chinese demand and higher rates will hurt gold prices, Lee said.
Spot gold rose 0.3 per cent to $1,184.85 an ounce by 0317 GMT, following an uptick in oil. Liquidity was thin in post-holiday trading, with Chinese and Japanese markets closed Friday.
Brent and US crude futures ticked higher on the first trading day of 2015 in Asia, supported by last week's larger-than-expected fall in U.S. crude stocks, although China's lacklustre economic data capped gains.
Higher oil prices support gold as the metal is seen as a hedge against oil-led inflation.
Despite Friday's gains, bullion is still down nearly 1 per cent for the week.
The dollar index, a measure of the greenback's strength against a basket of six major currencies, was trading close to its highest in nearly nine years.
