Gold prices were on track to fall for a third straight session on Friday, weighed by higher yields and a steady dollar, but the bullion retained its spot over the key $2,000 level on expectations of interest rate cuts towards the end the year, reports Reuters.
Spot gold was down 0.6 per cent to $2,003.08 per ounce by 1001 GMT, and fell 0.7 per cent for the week. US gold futures fell 0.7 per cent to $2,006.60.
Gold's losses were limited due to concerns over the US debt ceiling issue and lingering concerns about the country's banking sector, said Lukman Otunuga, senior research analyst at FXTM.
Safe-haven bullion tends to gain during times of economic or financial uncertainty.
There is a 90 per cent chance of the US Federal Reserve holding rates at their current level in June.
Traders have "practically priced in a 25 basis point cut by September," while the bullish sentiment in the (gold) market still stands strong over expectations of the Fed cutting rates later this year, Otunuga said.
US Federal Reserve Governor Michelle Bowman, however, reiterated the central bank's stance on raising rates if necessary to fight still-high inflation.
Higher rates weigh on gold, which bears no interest.
The dollar was up 0.1 per cent and closed to more-than-a-week high from the last session, with the currency due to see its highest weekly rise since late February. With a stronger dollar, bullion gets more expensive for holders of other currencies. Benchmark 10-year yields were higher on the day, but due for a third weekly fall.
Elsewhere, ANZ in a note said it expects central banks in developing economies to keep up their demand for gold to protect their foreign exchange reserves.
Spot silver dropped 1.6 per cent to $23.78 per ounce, platinum fell 1.0 per cent to $1,082.59 while palladium was up 0.8 per cent to $1,563.39.
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