Mumbai, 23 Feb (Commoditiescontrol): Gold prices on Friday were set for their first weekly gain in two, supported by a softer dollar and safe-haven buying, as investors awaited further clues on when the U.S. Federal Reserve is likely to begin cutting its interest rates.
Spot gold was up 0.1% at $2,026.5 per ounce, and has gained 0.7% for the week so far. U.S. gold futures edged 0.2% higher to $2,035.5 per ounce.
Turmoil in the Middle East also lifted bullion's safe-haven appeal. Yemen's Iran-aligned Houthis claimed responsibility for an attack on a UK-owned cargo ship, and they targeted Israel's port and resort city of Eilat with ballistic missiles and drones.
The dollar index was down 0.3% for the week so far, making greenback-priced bullion more affordable to overseas buyers.
With inflation easing and the labour market normalising, the risks to the economy have become "two-sided," but it's not yet time to reduce interest rates, U.S. Federal Reserve Governor Lisa Cook said.
Another Fed official sees 'no rush' to interest rate cuts to see if a recent uptick in inflation signals stalling progress toward price stability or is just a bump in the road.
Minutes of the Fed's latest policy meeting released on Wednesday showed that a majority of the central bank's policymakers are concerned about the risks of cutting interest rates too soon.
Markets are currently pricing in a 64% chance of a cut in June, according to the CME Fed Watch Tool. Lower interest rates boost the appeal of holding non-yielding bullion.
Spot platinum was up 0.1% at $903.25 per ounce, palladium rose 0.3% at $970.48, while silver was up 0.3% at $22.80 per ounce.
(By Commoditiescontrol Bureau: 09820130172)
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