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Gold down 0.3% so far this week
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U.S. dollar inches 0.1% higher
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Platinum set for fifth weekly fall
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U.S. CPI data due next week
(Updates prices)
By Kavya Guduru
Feb 10 (Reuters) - Gold prices edged lower on Friday and
were set for a second straight weekly drop, as investors
remained wary of impending interest rate hikes by the U.S.
Federal Reserve to tame high inflation.
Although gold is seen as an inflation hedge, higher rates
tend to dull the appeal of bullion, which pays no interest.
Spot gold was down 0.1% at $1,859.80 per ounce, as of
0704 GMT, hitting its lowest level since Jan. 6 earlier in the
session. For the week so far, the metal was down 0.3%.
U.S. gold futures fell 0.4% to $1,858.30.
Last week's stronger-than-expected U.S. job numbers have
contributed to expectations that the Fed will end up concluding
its rate-hike cycle above 5%, while rate-cut expectations for
the second half of this year have evaporated and driven gold
lower, said Ilya Spivak, head of global macro at Tastylive.
Market participants are now expecting the Fed's target rate
to peak at 5.153% in July from a current range of 4.5% to 4.75%. Richmond Fed President Thomas Barkin said on Thursday "it
just makes sense to steer more deliberately" with any further
rate increases and that the decline in inflation seen so far had
been "distorted" by some falling goods prices.
Barkin's comments came after Fed Chair Jerome Powell and
several other policymakers this week indicated that interest
rates might need to move higher than expected.
Gold prices have been in a consolidation mode and struggling
for direction for the past several days, said Tastylive's
Spivak, adding that the next big inflection point was likely to
be the U.S. CPI report next week.
The dollar edged 0.1% higher against its rivals. A
stronger greenback makes dollar-priced gold more expensive for
buyers holding other currencies. Elsewhere, spot silver rose 0.3% to $22.03 per ounce,
and palladium shed 0.7% to $1,617.54.
Platinum was down 0.2% at $952.42 and was on
track for a fifth consecutive weekly fall.
(Reporting by Kavya Guduru in Bengaluru; Editing by Uttaresh.V,
Subhranshu Sahu and Sherry Jacob-Phillips)
