Gold prices slipped on Friday due to a stronger dollar, but were set for a weekly gain as the U.S Federal Reserve's decision to retain its interest rate-cut projection for 2024 bolstered bullion's appeal.
Spot gold was down 0.7% at $2,166.47 per ounce as of 0746 GMT. It has risen 0.5% so far this week, and is on track for a fourth weekly gain in five .
U.S. gold futures fell 0.8% to $2,168 per ounce.
The dollar advanced to a three-week high and was on track for a second weekly rise, making greenback-priced gold more expensive for other currency holders. [USD/]
"Impending rate cuts are generally supportive of gold prices and provide a floor for the yellow metal once the rate-cutting process comes into effect," IG market strategist Yeap Jun Rong said.
"For now, it seems that gold is in extreme overbought conditions, which may call for some near-term cooling in its recent rally, with further downside to leave the $2,148 level on watch as immediate support to hold."
Gold prices rose to an all-time high on Thursday after Fed policymakers indicated they still expected to reduce rates by three-quarters of a percentage point by the end of 2024 despite recent high inflation readings.
Fed Chair Jerome Powell on Wednesday said the inflation readings had not changed the overall story of slowly easing U.S. price pressures.
Gold, which pays no interest, benefits when interest rates fall as this reduces the opportunity cost of holding bullion.
Fed funds futures traders are now pricing in a 74% probability that the Fed will begin cutting rates in June, according to the CME FedWatch Tool.
Spot silver dropped 1.2% to $24.46 per ounce, platinum fell 0.5% to $903.55 and palladium lost 1.2% to $997.94. All three were on track for a weekly fall.
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