Resilient dollar puts gold on track for weekly dip - REUTERS
By Arundhati Sarkar
* Silver on track for third weekly fall
* Bullion down 0.7% this week
* Dollar set to strengthen for a second week (Updates prices)
July 23 (Reuters) - Gold prices edged lower on Friday as a stronger dollar dimmed bullion’s appeal and put it on course for its first weekly decline in five, with investors looking to the U.S. Federal Reserve’s next meeting for policy cues.
Spot gold fell 0.5% to $1,797.62 per ounce by 1032 GMT. U.S. gold futures slipped 0.4% to $1,797.80.
Bullion is down 0.7% this week after hitting its lowest in more than a week on Thursday.
Gold has been range-bound because of the strength of the U.S. dollar but could test $1,775 an ounce with the near-term outlook still bearish, said Kunal Shah of commodities trader Nirmal Bang Commodities.
Making gold expensive for holders of other currencies, the dollar index held near a 3-1/2-month peak and was heading for a second straight weekly gain.
Market focus now turns to next week’s U.S. Federal Reserve meeting for more clues on monetary policy after the European Central Bank on Thursday pledged to keep interest rates at record lows for some time.
“This means that negative interest rates will remain a permanent feature for now ... This should increase demand for gold noticeably in the medium to longer term,” Commerzbank said in a note.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Limiting gold’s losses, yields on U.S. Treasuries eased after an auction of $16 billion in 10-year TIPS was bid at a record low.
Silver slipped 1.2% to $25.15 per ounce, and was set for a third consecutive weekly fall.
Platinum fell 1.4% to $1,077.13, and palladium shed 0.4% to $2,707.43. (Reporting by Arundhati Sarkar in Bengaluru; editing by David Goodman and Jason Neely)