[BENGALURU] Gold fell to its lowest in over a week on Friday and was on track to mark its biggest weekly decline in more than a month, as the US dollar climbed on robust US economic data ahead of a US Federal Reserve meeting next week.

Spot gold fell 0.4 per cent to US$1,237.60 per ounce as of 1.41pm EST (1841 GMT). Earlier in the session, prices hit their lowest since Dec 4 at US$1,232.39. The yellow metal is down about 0.8 per cent so far this week.

US gold futures settled down 0.5 per cent, at US$1,241.40.

The US dollar rose to a 19-month high after data showed US consumer spending appeared to gather momentum while industrial production rebounded in November.

"The strength of the dollar has weighed across the complex. The key driver (of prices) in the next few sessions is going to be the markets' expectations for the Fed," said Suki Cooper, precious metals analyst at Standard Chartered Bank.

Markets are awaiting the Federal Open Market Committee (FOMC) meeting on Dec 18-19, at which the US central bank is widely expected to raise interest rates. The focus, however, would be on the outlook for 2019.

"With the Fed rate hike next week, any gold price rise will be hampered by expected dollar strength," said Ronan Manly, a precious metals analyst at Singapore-based dealer BullionStar.

Gold prices rose to a five-month peak of US$1,250.55 an ounce on Monday, but has given up all the gains as the dollar strengthened against a basket of major currencies.

"With China's economy slowing, along with Germany and parts of the European Union, one would expect interest in the gold market," Walter Pehowich, executive vice-president of investment services at Dillon Gage Metals, wrote in a note.

"But with the dollar being so strong... it's going to take a major news story to bring the price of gold back in favour with investors."

Among other precious metals, spot palladium was down 1.9 per cent at US$1,236.50 per ounce, after hitting an all-time high of US$1,269.25 on Thursday. Despite Friday's drop, the metal was on track to mark its third week of gains with prices up about 1 per cent so far this week.

"The palladium market is still set to be in deficit in 2019, but you could see some profit-taking and some concerns over the auto market weighing on the palladium prices into the year end," Standard Chartered Bank's Cooper said.

Silver fell 1.2 per cent to US$14.58 per ounce.

Platinum was down 0.7 per cent at US$787.70 per ounce and was set to post a sixth straight weekly decline.

REUTERS