Gold down weekly on Fed hawkish signals

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Gold prices edged higher on Friday on a weaker dollar but were still tied to their first weekly decline in three, weighed down by signals from U.S. central bankers that further interest rate hikes were on the way.

Spot gold rose 0.1% to $1,763.17 an ounce by 0303 GMT, en route to a weekly decline of around 0.4%.

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US gold futures rose 0.2% to $1,765.50.

Gold continues to be supported by rising recession risks, the still-evolving war in Ukraine and the spike in the US dollar, Fitch Solutions said in a note.

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« On the other hand, growing optimism about the Chinese economy, still-elevated risks of the US Federal Reserve raising rates further and more aggressively than the market expects, and a spike in inflation in the third quarter will continue to put pressure on gold. »

Offering some respite to gold, the dollar index, a rival safe haven, fell slightly, making bullion cheaper for overseas buyers.

However, the U.S. currency was still heading for its best week in a month as hawkish remarks from Fed officials and stronger-than-expected monthly domestic retail sales dampened a pullback triggered by signs of a slowdown in the economy. inflation.

Markets are currently pricing in an 87% chance of a 50 basis point hike at the December Fed meeting, after four consecutive 75 basis point hikes.

High interest rates discourage investment in gold, which earns no interest.

After months of declines, bullion prices soared on bets that U.S. rate hikes will slow, but analysts said institutional investors were wary and further gains could be elusive.

Among other metals, spot silver rose 0.8% to $21.11 an ounce, platinum added 0.4% to $984.50 and palladium climbed 0.7% to $2,020.21. All, however, were on track to end the week down. (Reporting by Arundhati Sarkar and Arpan Varghese in Bengaluru; Editing by Savio D’Souza)