Prices for gold inched higher on Friday as investors perceived that a selloff sparked by a rise in U.S. interest rates this week had run out of steam and the U.S. dollar weakened, thus making bullion cheaper for holders of other currencies.
Figures revealed Friday that spot gold rose 0.1% to $1,254.92 U.S. per ounce. Earlier in the session, it hit $1,251.05, a low since May 24. The metal fell about 1% this week.
What is more, U.S. gold futures for August delivery rose 0.2% to $1,256.60 U.S.
The dollar index firmed after data showed the number of Americans filing for unemployment benefits fell more than expected last week.
Gold was on track for a second weekly loss and had demurred more than 3% from a high of $1,295.97 U.S. on June 6 as investors braced for the Federal Reserve to raise interest rates and signal its policy outlook on Wednesday.
Bullion is sensitive to higher interest rates because they push bond yields higher, increasing the opportunity cost of holding non-yielding gold, and tend to boost the American dollar.
In other metals, prices for platinum rose 0.5% to $924.30 U.S. per ounce, having hit their lowest in more than a month on Thursday.
Meanwhile, palladium backtracked 0.2% to $868.10 U.S. per ounce, as it moved towards its first weekly decline in four weeks.
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