Gold rises, set for weekly gain on softer dollar

Gold inched higher and was poised for a second weekly gain on Friday, as a softer provided some respite against higher U.S. bond yields and rising expectations that central banks could begin easing economic support.

FUNDAMENTALS

* Spot gold rose 0.1% to $1,785.00 per ounce by 0216 GMT. U.S. gold futures edged 0.2% higher to $1,786.00.

* Bullion prices were en route to a second week of gains, aided by a weaker dollar which was set to decline this week.

* Bullion prices have traded in a broad $1,749-$1,800 range so far this month, with a steep rally in U.S. benchmark 10-year Treasury yields limiting its upside.

* The U.S. Federal Reserve should let its $8 trillion balance sheet reduce over the next couple of years, Fed Governor Christopher Waller said on Thursday.

* Atlanta Fed President Raphael Bostic also said he expects high inflation to persist into 2022 and the U.S. central bank should raise interest rates by the end of next year.

* The Bank of Japan is discussing phasing out a COVID-19 loan programme if infections in the country continue to dwindle, sources told Reuters, potentially setting the bank up to exit a key crisis-mode policy sooner than investors expect.

* Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes push government bond yields up, translating into a higher opportunity cost for holding bullion which pays no interest.

* Spot silver rose 0.2% to $24.18 an ounce and was on track for a fifth consecutive weekly gain.

* Platinum was up 0.5% at $1,053.80 per ounce and palladium gained 1% to $2,037.56.

DATA/EVENTS (GMT) 0600 UK Retail Sales MM, YY Sept 0800 EU Markit Mfg, Serv, Comp Flash PMIs Oct 1345 US Markit Mfg, Serv, Comp Flash PMIs Oct