Gold on course for worst week since November as dollar rises

Gold slipped to two-week lows and was set for its biggest weekly fall in nearly four months on Friday, pressured by a reviving dollar and rising stocks.

Spot gold is down about 1.4 percent so far this week, which could be its biggest weekly decline since the week ending November 9. It was down 0.3 percent at $1,309.13 an ounce at 1103 GMT, having touched its lowest since Feb. 14 at $1,305.53.

US gold futures shed 0.4 percent to $1,310.40.

"The news on jobs and Gross Domestic Product (GDP) was more favourable for the dollar, which has been gaining value. Because of that we are continuing to see some long liquidations," Afshin Nabavi, senior vice president at MKS SA, said.

"We have breached $1,315 and $1,310, which are very important support levels. Won't be surprised even if we see a test of $1,300 later today."

The dollar, which gained impetus from better than expected fourth quarter US GDP data, hit a 10-week high against the yen.

"Rallies in the dollar are taking their toll on gold much more than they were a few weeks ago which is a clear sign that sentiment towards the yellow metal has shifted," OANDA senior market analyst Craig Erlam wrote in a note.

"The next test below is $1,300, a break of which could be the catalyst for another bearish move, at which point $1,275-1,280 becomes notable support."

Gold rose to a 10-month peak of $1,346.73 last week, helped by expectations that the US central bank will pause interest rate increases, but has lost ground since as the dollar regained momentum.

"After it (gold) failed last week to rise above $1,350, the gold price is nearing the psychologically important $1,300 per troy ounce mark again today," Commerzbank analysts said.

"Better sentiment on the stock markets and a reluctance by the physical gold investors are weighing on its price."

Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.52 percent to 784.22 tonnes on Thursday, falling to their lowest level since late December.

Among other precious metals, spot palladium fell 0.6 percent to $1,534.31 per ounce, retreating from its all-time peak of $1,565.09 scaled earlier in the week. The metal is on course for a fourth consecutive week of gains.

Spot silver fell 0.3 percent to $15.55 per ounce, having earlier hit $15.46, a level last seen on Feb. 14.

Platinum fell 0.4 percent to $866.37. The metal is on track for a third straight weekly gain.