Gold faces weekly dip as recent rally subsides on hawkish Fed

Gold was headed for a weekly fall on Friday as the recent rally fizzled after several U.S. Federal Reserve officials suggested that interest rates would continue to rise, pouring cold water on market expectations that the U.S. central bank would pivot.

FUNDAMENTALS

* Spot gold was steady at $1,761.29 per ounce, as of 0017 GMT. U.S. gold futures were flat at $1,763.40 per ounce.

* Bullion is on track for a weekly decline of about 0.6%, despite surging to its highest level since mid-August on Tuesday.

* After months of decline, prices of bullion shot up as markets bet that U.S. interest rate hikes will slow, but analysts said institutional investors are wary and further gains could be elusive.

* Even under a “generous” analysis of monetary policy, the Fed needs to keep raising interest rates given that its tightening so far “had only limited effects on observed inflation,” St. Louis Fed President James Bullard said on Thursday.

* Minneapolis Fed Bank President Neel Kashkari said the U.S. central bank should not stop rate hikes until it’s clear that inflation has peaked.

* High interest rates discourage investing in gold, which does not bear any interest.

* Swiss gold exports to China and Turkey remained strong in October while shipments to India fell, Swiss customs data showed on Thursday.

* Nornickel is looking for alternative ways to deliver Russian raw materials to its Finnish Harjavalta plant starting from 2023 as Finnish railway operator VR is due to stop providing this service to it in six weeks. Nornickel is the world’s largest palladium producer.

* Spot silver rose 0.2% to $20.98 per ounce, platinum gained 0.5% to $985.41 and palladium added 0.5% to $2,015.12. All were, however, on course to end the week lower.