Feb 17 (Reuters) - Gold prices fell on Friday and were
set for a weekly drop, as a firmer dollar and worries of more
interest rate hikes by the U.S. Federal Reserve clouded the
outlook for non-yielding bullion.
FUNDAMENTALS
* Spot gold was down 0.3% at $1,832.42 per ounce, as
of 0051 GMT. Bullion has fallen 1.7% this week. U.S. gold
futures fell 0.6% to $1,841.00.
* The dollar index was up 0.1%. Gold competes with
the dollar as a safe store of value, and gains in the currency
also make bullion unattractive for overseas buyers.
* Two Fed officials said on Thursday the U.S. central bank
likely should have lifted interest rates more than it did
earlier this month, and warned that additional hikes in
borrowing costs are essential to lower inflation back to desired
levels.
* Money markets are now expecting benchmark rates to rise
above 5% by May and stay at those levels through the year.
* Gold is known as a safe investment amid inflation woes,
but high interest rates increase the opportunity cost of holding
non-yielding bullion.
* Data on Thursday showed the number of Americans filing new
claims for unemployment benefits unexpectedly fell last week.
* Data from the Labor Department showed monthly producer
prices accelerating in January. The producer price index for
final demand rebounded 0.7% last month after decreasing 0.2% in
December.
* The yield on 10-year Treasury notes rose to
its highest level since late December.
* Spot silver lost 0.6% to $21.48 per ounce, platinum fell 0.4% to $916.66 and palladium shed 0.6% to
$1,501.09.
DATA/EVENTS (GMT)
0700 UK Retail Sales MM, YY Jan
0700 UK Retail Sales Ex-Fuel MM Jan
0745 France CPI (EU Norm) Final MM, YY Jan
1330 US Import Prices YY Jan
(Reporting by Kavya Guduru in Bengaluru; Editing by Rashmi
Aich)
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