PRECIOUS-Gold is heading for its first weekly profit in five years amid a subdued dollar and inflation problems

B.y seer Dareen

December 17 (Reuters) – Gold rose on Friday on its way to its first weekly gain of five, buoyed by a subdued dollar, with the attraction of precious metals as a safe haven also aided by inflation risks.

Spot gold XAU = rose 0.5% to $ 1,808.30 an ounce through 1132, on track for an increase of about 1.4% this week. US gold futures GCv1 rose 0.6% to $ 1,809.60.

The dollar .DXY stabilized near a more than 1-week low hit Thursday, a day after the Federal Reserve announced three rate hikes through the end of 2022, making gold more attractive to foreign buyers. U.S. DOLLAR/

Unprofitable gold was also boosted by a decline in US Treasury bond yields. US/

Analysts said gold rose despite the possibility of higher US interest rates that add to the opportunity cost of holding precious metals as the prospect of rate hikes was factored in prior to the Fed’s announcement.

“A combination of real returns, coupled with a weaker dollar, has started this short-covering rally in gold, along with a weaker dollar,” said independent analyst Ross Norman, adding that gold hit the $ 1,835 level in early January could test.

“Observers are watching to what extent gold can build any kind of momentum on this move and it appears to be fighting to the upside.”

Safe-Hafen-Gold also appeared to be taking some evidence of decreased risk-taking due to fears about the Omicron coronavirus variant. MKTS / GLOB

“The gold market is benefiting from high inflation, which outweighs the restrictive stance of the Fed … Physical gold purchases from bulk consumers are holding up well,” ANZ analysts said in a research note. GOL / AS

In November, inflation in the euro zone rose to its highest level ever.

palladium XPD =, meanwhile, rose 5.3% to $ 1,821.72, extending gains from a sharp rally on Thursday that traders attributed to a correction after falling around $ 300 in the past five days.

silver XAG = rose 0.80% to $ 22.64 an ounce. platinum XPT = fell 0.1% to $ 935.71.

(Reporting by seer Dareen and Arpan Varghese in Bengaluru; editing by Shailesh Kuber)

(([email protected]))

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.