April 21 (Reuters) - Gold prices dropped about 1% on Friday as markets see the U.S. Federal Reserve committed to bringing down inflation, that would require higher rates for longer and pressure bullion as it heads for its biggest weekly decline in about two months.
Spot gold was down 0.8% at $1,988.22 per ounce by 1022 GMT. Bullion has lost about 0.7% so far this week, its biggest weekly decline since late February. U.S. gold futures dipped 1% to $1,999.70.
Gold was seeing a re-pricing based off of the Fed's rate-hike path ahead and hawkish comments by some board members, said Carlo Alberto De Casa, external analyst at Kinesis Money.
The market is now expecting rates being higher for a longer time, with another rate hike after May, De Casa said.
Rate hikes raise the opportunity cost of holding non-interest-bearing gold.
Markets are pricing in an 88% chance of a 25-basis-point hike in May, which set the dollar for its first weekly gain in over a month, making bullion expensive for overseas buyers.
Fed officials said on Thursday inflation remains "far above" the central bank's 2% target. Fed Governor Michelle Bowman reiterated that more work needs to be done to bring down too-high inflation.
Investors eye the U.S. GDP and PCE numbers next week for more data on inflation.
The upcoming GDP data and the price deflator for consumer expenditures, Fed's preferred inflation measure, could trigger some price movement, but no clear direction is likely before the Fed's meeting, said analysts at Commerzbank in a note.
Worries over sticky inflation also see the Bank of England being expected to raise rates for the twelfth consecutive meeting in May and the European Central Bank raising rates for a seventh straight meeting.
Spot silver fell 0.8% to $25.08 per ounce, and is headed for its first weekly decline in six.
Platinum rose 0.4% to $1,097.41, while palladium jumped 0.9% to $1,601.08.
