PRECIOUS-Gold eases as dollar rallies on hawkish Fed
* Silver headed for biggest weekly fall since Sept. 7
* Platinum set for worst week since late Sept
* Fed holds rates for now, on track to gradually hike them (Updates prices)By Sumita LayekBENGALURU, Nov 9 (Reuters) - Gold dipped on Friday, on trackfor its biggest weekly fall since August, as the dollar rosetowards 16-month highs after U.S. Federal Reserve stuck to itstight monetary stance and looked set to deliver another ratehike in December.Spot gold was 0.5 percent lower at $1,218.01 perounce at 1156 GMT, having touched its lowest since Nov. 1 at$1,217.20.Gold is down more than 1 percent for the week so far, whichwould be its biggest decline since the week of Aug. 17.
U.S. gold futures fell 0.5 percent to $1,219.2 perounce."It is pretty clearly a dollar-related move today, which hashappened since the latest decision from the U.S. Fed," saidCapital Economics analyst Ross Strachan.
The sentiment in the market "is quite cautious after recentspikes, consolidating in the $1,220 to low $1,230 levels and notbreaking out of that."Spot gold touched a peak of $1,243.32 on Oct. 26, itshighest since mid-July.
The dollar firmed towards a 16-month high underpinned by arobust U.S. economy and rising interest rate environment, makingbullion more expensive for holders of other currencies. Rate increases also pressure gold prices by increasing theopportunity cost of holding non-yielding bullion."We remain cautious on gold here as roughly half the recentadvance seems to have been rolled back in recent days on accountof a stronger dollar and more resiliency in U.S. equitymarkets," said INTL FCStone analyst Edward Meir in a note."In addition, U.S. interest rates seem to be on the marchagain ... there is not much of an upside trigger that could leadto a sustainable rally."The Fed held interest rates steady on Thursday, having hikedrates three times this year, but remained on track to keepgradually tightening borrowing costs, even one in Decemberbecause of U.S. economic strength, rising inflation and solidjobs growth. "We are expecting the current Fed tightening cycle to endsooner, by the middle of next year ... so we are expecting goldprices to rise to $1,300 by the end of next year," Strachanadded.
Among other precious metals, silver was down 0.8percent to $14.29 per ounce. The metal was headed for itsbiggest weekly percentage decline in nine weeks, slipping morethan 2 percent so far.Platinum dipped 0.7 percent to $857.86 an ounce. Themetal was down about 1 percent so far for the week, its biggestfall since late September.
Palladium fell 0.6 percent to $1,117.38 per ounce,though it was up 0.2 percent for the week, set for its fourthweekly gain. (Reporting by Sumita Layek and Eileen Soreng in Bengaluru;editing by David Evans and Elaine Hardcastle)
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