LONDON. — Gold edged higher on Friday as a retreat in the dollar helped the metal to snap two days of losses, but prices remained near three-week lows after the US Federal Reserve indicated that it may still raise interest rates this year. Gold is on track for its biggest weekly drop in nine weeks, down 1,4 percent, after the Fed indicated after its two-day policy meeting this week that a December rate rise is still a possibility.
Rising interest rates tend to weigh on gold because they lift the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
Spot gold was up 0,2 percent at $1 148,06 an ounce by 10.23am GMT, while US gold futures for December delivery were up 60c at $1 147,90. “The market was clearly anticipating kicking rate rises into the long grass, and of course a December rate rise is still very much on the cards,” Mitsubishi analyst Jonathan Butler said. — Reuters.