Gold rises to the highest level in a week as the dollar falls

Gold prices rose to a one-week high as the dollar fell on Friday, but they came close to recording the worst quarterly drop since March last year due to concerns that the Federal Reserve (the US central bank) is about to raise interest rates significantly.

And gold rose in spot transactions 0.6% to $ 1670.10 an ounce by 14:28 GMT, consolidating its gains so far this week to 1.7 percent.

And US gold futures rose 0.6% also to $ 1678.80.

“The gold market is in an area where we can see some bullish movement… (But) it all depends on what the dollar and interest rates do over the weekend,” said Daniel Pavilonis, chief market analyst at RGO Futures.

Gold prices have fallen 7.6% since the beginning of the current quarter, to record their sixth consecutive monthly decline, in the longest series of monthly declines in four years.

Higher interest rates reduce the attractiveness of gold because it increases the opportunity cost of the non-yielding yellow metal holders.

As for other precious metals, silver rose in spot transactions by 1.6 percent to $19.11 an ounce.

Platinum fell 0.1% to $864.39 an ounce. The two metals are heading to decline for the second consecutive quarter.

Palladium rose 0.2% to $2,205.40 an ounce. It has gained about 14% so far this quarter.

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