Gold slips, but still set for 4th weekly gain on dovish Fed

Gold prices eased on Friday due a slight rebound in US bond yields and a firmer dollar, although a dovish stance on monetary policy by the Federal Reserve kept bullion on track for its fourth straight weekly rise.

Spot gold was down 0.4% at $1,822.50 per ounce by 0936 GMT, but was up 0.8% so far this week.

US gold futures fell 0.3% to $1,823.20 per ounce.

"We are back again at $1,820 threshold and are seeing a lack of buying interest from ETF investors. Also, today bond yields are slightly up and dollar is rather steady," said Commerzbank analyst Carsten Fritsch.

However, the view that Fed will not react to this strong rise in inflation is keeping gold prices above $1,800, he added.

Spot gold may rise to $1,813

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.3% to 1,034.37 tonnes on Wednesday, its lowest in nearly two months.

Benchmark US 10-year Treasury yields edged up to 1.3305% after falling to a one-week low of 1.2920% in the previous session. The dollar index was headed for a strong weekly gain. [US/

This week, Fed Chair Jerome Powell reiterated that rising inflation is likely to be transitory and the US central bank would continue to support the economy, which sent gold prices to a one-month high on Thursday.

Some investors view gold as a hedge against higher inflation that could follow stimulus measures and it also tends to gain when interest rates are low.

Gold prices go up by Rs450 to Rs109,350 per tola

If gold closes the week well above $1,800, it would be bullish catalyst for gold in the near-term, said Vincent Tie, sales manager at Singapore dealer, Silver Bullion.

Elsewhere, silver fell 0.6% to $26.16 per ounce, while platinum lost 0.5% to $1,132.66.

Palladium slipped 0.6% to $2,715.19 per ounce and was headed for its first weekly decline in four.