Gold prices set for weekly gain as dollar slides

Gold prices rose on Friday as the dollar continued to weaken, and helped put bullion on track for a second straight weekly rise amid cooling bets for a more aggressive Federal Reserve monetary policy

Spot gold was up 0.5% at $1,859.32 per ounce. U.S. gold futures were up 0.5% at $1,863. For the week so far, futures are up 1.2%

Gold this week has been supported by a moderation somewhat in market expectations from the Fed’s monetary policy for next year, and most importantly the weaker U.S. dollar, said Ilya Spivak, a currency strategist at DailyFX.

There is price support at $1,830 on the downside and on the topside the next key level is around $1,885, Spivak added

Minutes of the Fed’s May 3-4 policy meeting released on Wednesday highlighted, as the market expected, that most participants favoring additional 50 basis point rate hikes at the June and July meetings

Higher short-term U.S. interest rates and bond yields raise the opportunity cost of holding bullion, which yields nothing

The dollar index fell en route a second straight weekly decline, making bullion less expensive for buyers holding other currencies

“We need a clearer signal that hard economic data is turning sour for the Fed to even think about a pause (in tightening)… hence gold investors are still reluctant to push the envelope significantly higher,” said Stephen Innes, managing partner at SPI Asset Management

“If the Fed signals a pause, then gold will move much higher, but until they do so, we could be range trading for a b