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Gold prices edged down on Friday as the dollar hovered around a 20-year peak, while the likelihood of more aggressive interest rate hikes by the US Federal Reserve going forward also weighed on the non-yielding bullion’s appeal.

Spot gold fell 0.2% to $1,667.40 per ounce by 0406 GMT and was down 0.4% for the week.

US gold futures was down 0.3% to $1,676.40.

The dollar index was around its highest level since 2002 touched on Thursday and benchmark 10-year US Treasury yield was at a 11-year peak buoyed by the Fed’s 75-basis-point rate hike and its hawkish outlook on Wednesday.

Rising rates dull bullion’s appeal since it yields no interest. Gold prices have fallen nearly 20% since scaling above the key $2,000 per ounce mark in March.

“I expect prices to remain choppy in the near-term, as the market has already discounted the (75 bps) rate hike, that is why we are not seeing a big fall in the prices,” said Ajay Kedia, director at Kedia Commodities, Mumbai.

Gold prices at 2-1/2-year low as traders brace for Fed outcome

“We see $1,650 as support and $1,720 as resistance… The expectations of further rate hike is capping gold’s upsides.” A number of central banks, from Indonesia to Norway, raised their interest rates on Thursday, following the US central bank, stoking concerns of a global recession.

European Central Bank board member Isabel Schnabel said on Thursday Euro zone inflation is set to go higher, defending the ECB’s plans to raise rates further.

Indicative of investor sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell to 30,547,653 ounces on Thursday, its lowest level since MarchReuters

Spot silver fell 0.4% to $19.56 per ounce and palladium was down 1.2% at $2,143.61.

Platinum shed 0.6% to $894.90 and was down 1.4% for the week, its first weekly decline in three.

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