Dollar Strength Weighs on Gold Ahead of Fed Rate Decision

Gold prices ticked up on Friday but were set to post a weekly loss. The stronger dollar and growing expectations of elevated interest rates by the Federal Reserve weighed on gold.

The dollar was headed for a weekly gain, making greenback-priced metals more expensive for holders of other currencies. US Treasury yields extended gains, further pressuring gold.

Kelvin Wong, senior market analyst at OANDA, said 'Focus will definitely continue to be on the interest rate situation.' He noted that markets pricing in a more hawkish Fed strengthen the dollar and negatively impact gold.

Philadelphia Fed President Anna Paulson emphasized the importance of returning inflation to 2%, saying she would support policy path that achieves this while carefully weighing risks. New York Fed President John Williams also suggested tighter monetary policy is coming.