Gold set for fourth weekly gain on softening dollar

By Arijit Bose

BENGALURU (Reuters) - Gold rose on Friday as the dollar slipped on expectations that brakes could soon be applied to U.S. interest rates, putting the non-yielding metal on track for a fourth straight weekly gain.

Spot gold rose 0.4 percent to $1,292.01 an ounce by 1320 GMT. U.S. gold futures were up 0.4 percent at $1,292.90.

The dollar slipped against other major currencies, impaired by Fed Chairman Jerome Powell's comment that the central bank could be patient on rate policy.

"Gold rose on a somewhat weaker dollar, but at the moment it seems to be trying to overcome the $1,300 hurdle," said Commerzbank analyst Daniel Briesemann.

The precious metal was also supported by increasing market nervousness over U.S. President Donald Trump's unbending demand for a wall to be built on the border with Mexico.

Trump threatened on Thursday to use emergency powers to bypass Congress to pay for the proposed wall.

"If more speculators jump on the bandwagon (because of the U.S. government shutdown), gold will pass the $1,300 level," Briesemann said.

Gold, which is used as a safe-haven investment during times of economic, political and financial uncertainty, is up about 0.6 percent for the week.

"Volatile equity markets and a stalemate over the U.S. government shutdown should keep (gold) prices well supported. In fact, investors continue to pour money into the gold ETF market," ANZ analysts said in a note.

Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, are near their highest since late July.

"The $1,300 resistance level for gold is looking very vulnerable. Risk aversion has been supportive, but as we're seeing now, its primary driver is the dollar," said OANDA senior market analyst Craig Erlam.

"And the dollar softening as trade relations between the U.S. and China improve should continue to lift gold."

U.S. officials expect China's top trade negotiator to visit Washington this month after this week's talks with mid-level officials in Beijing.

Among other precious metals, palladium firmed by 0.1 percent to $1,323.49 an ounce and was up about 1.8 percent for the week. Silver, meanwhile, was up 0.6 percent at $15.66 and platinum rose 0.2 percent to $821.30.

(Reporting by Arijit Bose in Bengaluru; Editing by David Goodman)