Gold decreased for a third straight day as buyers sold off on a recent rally to near three-week highs, but stayed on track for a second successive weekly gain driven by fading expectations of an imminent hike in U.S. interest rates.
The metal is up 0.7% so far this week, holding on to nearly half the sharp gains it made on Tuesday after downbeat U.S. data fueled talk that the Federal Reserve will hold off raising rates at its September policy meeting.
Spot gold hesitated 0.5% at $1,331.23 U.S. an ounce on Friday, while U.S. gold futures for December delivery were $6.70 lower at $1,334.90 U.S. Gold peaked at $1,352.65 an ounce after rallying 1.8% on Tuesday.
Expectations that the Fed would stand pat on interest rates after hiking for the first time in nearly a decade in December have helped push gold 26% higher this year.
Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Meantime, silver was down 1.23% at $19.34 U.S. an ounce, while platinum was 1.3% lower at $1,069 U.S. an ounce. It was, however, on track for its first weekly gain in six weeks, up 1.7%.
Palladium was down 1% at $675.50 U.S.
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