Gold prices set for best week in 5 after Fed decision

[BENGALURU] Gold prices were flat on Friday (Dec 17), but on track for their best week since mid-November as the dollar weakened after the US Federal Reserve decided to withdraw its pandemic-era stimulus, making bullion cheaper for holders of other currencies.

Spot gold was flat at US$1,797.47 per ounce, as of 12.42 am GMT. US gold futures edged up 0.1 per cent to US$1,799.80.

The precious metal was set for its first weekly gain in 5, up 0.8 per cent.

The dollar index hit a 1-week low in the previous session, lifting the appeal of the greenback-priced metal.

The Bank of Japan is set to keep monetary policy ultra-loose on Friday but may dial back emergency pandemic-funding.

Britain became the first G-7 economy to hike interest rates since the onset of the pandemic on Thursday (Dec 16), with the US Fed also signalling plans to tighten in 2022 but the European Central Bank only slightly reining in stimulus.

In the United States, supporting the case for higher interest rates, data on Thursday showed US weekly jobless claims remained at levels consistent with tightening labour market conditions.

The Fed's decision to accelerate reduction of bond purchases is "a well-calibrated" response to rising wage and price pressures but increases risks for emerging markets, IMF spokesperson Gerry Rice said on Thursday.

Spot silver dipped 0.1 per cent to US$22.43 an ounce, but was on track for its first weekly gain since the week ended Nov 12.

Platinum was up 0.1 per cent to US$937.37 and palladium gained 1.1 per cent to US$1,749.31.

REUTERS