By Eileen Soreng
BENGALURU (Reuters) - Gold prices fell to their lowest in a week on Friday, and were set for their biggest weekly fall since August, on a firmer dollar as the U.S. Federal Reserve indicated they will continue to raise interest rates, lowering demand for bullion.
Spot gold was 0.4 percent lower at $1,219.7 per ounce at 0715 GMT, having touched its lowest level since Nov. 1 at $1,217.20.
Gold is down about 1 percent for the week so far, its biggest weekly decline since the week of Aug. 17.
U.S. gold futures fell 0.4 percent to $1,219.8 per ounce.
"Gold has come under pressure because of a stronger dollar. Also the FOMC meeting showed no change in interest rates. Market sentiment from here could be bearish for gold," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
Higher interest rates raise the opportunity costs of holding gold, which does not pay interest and incurs costs to store and insure.
The dollar index, which measures the greenback against a basket of six major currencies, was up 0.1 percent, having climbed about 0.8 percent in the previous session.
"We remain cautious on gold here as roughly half the recent advance seems to have been rolled back in recent days on account of a stronger dollar and more resiliency in U.S. equity markets," said INTL FCStone analyst Edward Meir in a note.
"In addition, U.S. interest rates seem to be on the march again... there is not much of an upside trigger that could lead to a sustainable rally."
The Fed has hiked rates three times this year and is widely expected to do so again in December because of a robust U.S. economy, rising inflation and solid jobs growth.
"With a firmer dollar and the uncertainty of the mid-terms behind us, we see a move through the 100-day moving average and test $1,208-$1,210, with the potential for the psychologically important $1,200 to come into play," traders at MKS PAMP said in a note.
Among other precious metals, silver was down 0.3 percent to $14.37 per ounce. The metal was headed for its biggest weekly percentage decline in nine weeks, slipping more than 2 percent so far.
Platinum dipped about 1 percent to $855.70 an ounce. The metal was down about 1 percent so far for the week, its biggest fall since late September.
Palladium fell 0.2 percent to $1,121.67 per ounce, though it was up 0.7 percent for the week, set for its fourth weekly gain.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)