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Gold up 1.8% so far this week
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U.S. dollar heads for weekly loss
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Platinum on track for best week since Nov
(Adds comment and details, updates prices)
By Kavya Guduru
March 3 (Reuters) - Gold prices rose on Friday and
looked set to post their biggest weekly gain since mid-January,
as the U.S. dollar eased, while traders assessed prospects of
further rate hikes by the Federal Reserve.
Spot gold was up 0.4% at $1,843.00 per ounce, as of
0717 GMT, rising about 1.8% so far in the week. U.S. gold
futures advanced 0.5% to $1,849.50.
Interest rate hikes to contain high inflation discourage
investors from placing money in non-yielding assets such as
gold.
"There's been a little bit of position-squaring ahead of
what is the main event risk left for the week, which is a bunch
of different Fedspeak and the services ISM number," said Ilya
Spivak, head of global macro at Tastylive.
The dollar index eased 0.2% and was headed for its
first weekly loss since January, making bullion more affordable
for buyers holding other currencies. The impact of higher U.S. interest rates on the economy may
only begin to "bite" in earnest this spring, an argument for the
Fed to stick with "steady" quarter-point rate increases, Atlanta
Fed President Raphael Bostic said on Thursday.
The number of Americans filing new claims for unemployment
benefits fell again last week, adding to fears that the Fed
would keep hiking interest rates for longer. Another report on
Thursday showed labour costs grew much faster than previously
estimated in the fourth quarter.
If Fedspeak reinforces that interest rates could move higher
still, then "gold could be in for a troubling end of the week",
Spivak said.
Money markets expect the Fed's target rate to peak at 5.442%
in September. "We see limited upside in the USD, which is a tailwind for
gold prices. Even with higher terminal rates, the USD is likely
to weaken in the second half of 2023," analysts at ANZ said in a
note.
Spot silver gained 0.8% to $21.05 per ounce and
palladium was up 0.1% at $1,450.74.
Platinum added 0.6% at $965.45 and was on track for
its best week since November.
(Reporting by Kavya Guduru in Bengaluru; Editing by Subhranshu
Sahu)
