Gold Heads For First Weekly Drop in Five Weeks As Dollar Strenghtens

Gold prices are headed for their first weekly decline in five weeks on Friday as a stronger dollar made bullion more expensive for holders of other currencies and offset support from lower U.S. bond yields.

Spot gold was flat at $1,807.45 per ounce. Bullion is down 0.2% this week. U.S. gold futures were steady at $1,806.20.

The dollar index hovered beneath a 14-week high against its rivals and was heading for its second straight weekly rise.

Risk appetite in wider financial markets for most of this week was fragile due to worries over the coronavirus’ Delta variant impacting global economic recovery, sending investors to take refuge in the dollar.

Investors' attention will be on next week’s U.S. Federal Reserve meeting for more clues on monetary policy going forward.

On Thursday, the European Central Bank pledged to keep interest rates at record lows for some time.

Offering some respite to gold, yields on U.S. Treasuries eased after an auction of $16 billion in 10-year TIPS was bid at a record low.

Elsewhere, silver slipped 0.2% to $25.40 per ounce and was set for its third weekly fall, while palladium rose 0.4% to $2,727.94, and platinum was flat at $1,092.71.