Gold prices were on track for a third straight weekly decline on Friday as investors fretted over the prospects of aggressive rate hikes from the US Federal Reserve, though a slight pullback in dollar helped the precious metal to tick higher on the day, reports Reuters.
Spot gold rose 0.3 per cent to $1,883.31 per ounce by 1147 GMT, but was down 0.7 per cent for the week. US gold futures were up 0.4 per cent at $1,883.50.
The dollar index slipped 0.4 per cent after hitting a fresh 20-year high, making gold less expensive for those holding other currencies. However, the US currency was headed for a fifth weekly gain, while the benchmark US Treasury yield held near the key 3 per cent level.
"Gold's got some pretty strong headwinds, notwithstanding serious inflation, from both the dollar index being up to multi-decade highs and the 10-year US Treasury back above the 3 per cent level," independent analyst Ross Norman said.
European stocks headed for their worst week in two months as investors expect bigger interest rate hikes will be needed to rein in inflation.
While gold is perceived as an inflation hedge, higher US interest rates lift the opportunity cost of holding zero-yield bullion.
The Federal Reserve on Wednesday raised its benchmark rate by half a percentage point, the most in 22 years.
"Gold was unable to capitalize on Powell's less hawkish than expected message this week, with bullion bulls aware that US rates are bound to rise anyway," Han Tan, chief market analyst at Exinity, said.
Silver fell 0.5 per cent to $22.40 per ounce, platinum dropped 2.6 per cent to $955.26 and palladium was also down 2.6 per cent, to $2,130.83.
