Gold set for second straight yearly drop

Gold held steady on Friday, but was headed for a second straight yearly loss as aggressive rate hikes by the U.S. Federal Reserve dented the non-yielding bullion’s appeal.

* Spot gold was little changed at $1,815.20 per ounce as of 0042 GMT. U.S. gold futures fell 0.2% to $1,821.90.

* Bullion was headed for an annual decline of 0.7% as the Fed’s hefty interest rate hikes boosted the dollar and made gold expensive for holders of foreign currencies. The dollar index eyed an yearly rise of more than 8%.

* However, gold prices have risen nearly $200 from a more than two-year low hit in September on hopes that the U.S. central bank might slow its pace of rate hikes.

* The Fed raised interest rates by 50 basis points (bps) in December after four consecutive increases of 75 bps each.

* Higher rates increase the opportunity cost of holding gold as it pays no interest.

* Meanwhile, data on Thursday showed that U.S. weekly jobless claims ticked higher last week but remain in a range, indicating the job market remains tight.
* China’s net gold imports via Hong Kong slipped to their lowest level in six months in November, official data showed on Thursday.

* Spot silver rose 0.1% to $23.88, platinum slipped 0.6% to $1,048.57 and palladium lost 0.1% to $1,812.36.

* Silver and platinum were both headed for an yearly rise, while palladium was headed for an annual decline of over 4%.