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Gold climbed on Friday, poised for its best week since mid-November, as the dollar weakened following moves by global central banks to withdraw pandemic-era stimulus in response to broadening inflationary risks.

Spot gold rose 0.4% to $1,807.00 per ounce by 0728 GMT, while US gold futures gained rose 0.5% to $1,807.30. The metal has risen about 1.4% this week.

The dollar index remained under pressure after hitting a one-week low on Thursday, making bullion cheaper for holders of other currencies.

"For the most part, gold seems to be responding to the Fed's decision of remaining behind the curve and keeping policy fairly loose, and the inflation dynamic has continued to push investors into gold as a key store of value," said IG Markets analyst Kyle Rodda.

The Fed said it would pave the way for a three quarter-percentage-point interest rate increases by the end of 2022 as a response to full employment and surging inflation.

Gold anchors near two-week low

Britain became the first G7 economy to hike interest rates since the onset of the pandemic on Thursday, with the European Central Bank only slightly reining in stimulus.

The Bank of Japan on Friday decided to taper its corporate debt purchases to pre-pandemic levels.

The benchmark 10-year yield has dropped 3.8% this week.

"US 10-year real yield moved deeper into the negative territory, keeping the investment backdrop supportive," ANZ analysts added in a research note.

Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of holding non-interest bearing bullion.

"The market seems to be approaching a gold price of $1,800 pushing towards $1,830, which could be the key levels to look at," added Rodda.

Silver rose 0.3% to $22.53. Platinum rose 0.1% to $937.62 and palladium rose 0.3% to $1,735.23.

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