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Gold suffers biggest weekly drop since December

New York - US dollar rises amid rate-hike expectations.

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Shares rose broadly worldwide on Friday, with strong technology stocks and a retreat in Treasury yields lifting Wall Street, while gold had its biggest weekly loss this year as investors shrugged off concerns about interest rate hikes.

The dollar edged higher as investors positioned for a more aggressive Federal Reserve to raise U.S. interest rates three times this year.

Gold and forex rates in UAE

In its semiannual report to Congress released Friday, the Fed's Washington-based Board of Governors looked past a recent stock market sell-off and inflation concerns, saying it sees steady growth continuing and no serious risks on the horizon that might pause its planned pace of rate hikes.
Gold's spot market price dropped 0.2 percent to $1,328.97 an ounce. It shed about 1.4 percent this week, its biggest weekly decline since early December.

"We remain somewhat cautious on gold over the short term given that we think the dollar rally is still not over, especially in the light of U.S. Treasury yields remaining elevated," said INTL FCStone analyst Edward Meir.

In late New York trading on Friday, the euro decreased to $1.2298 from $1.2332 in the previous session, and the British pound increased to $1.3969 from $1.3958 in the previous session, Xinhua news agency reported.

The Australian dollar decreased to $0.7835 from $0.7846
The US dollar bought 106.73 Japanese yen, higher than 106.6700 Japanese yen of the previous session. The US dollar was up to 0.9361 Swiss franc from 0.9330 Swiss franc, and it fell to 1.2664 Canadian dollars from 1.2714 Canadian dollars.

The US central bank released its semi-annual monetary policy report on Friday morning. According to the report, the policy-makers reaffirmed their position in raising interest rates gradually.

"The Fed expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain Strong," the report said.

Inflation on a 12-month basis is expected to move up this year and to stabilize around the Committee's 2 per cent objective over the next few years, it added.

Analysts said the Fed's recent hawkish remarks spurred market speculation that it will raise interest rates as many as three times by year-end.

The dollar index, which measures the greenback against six major peers, rose 0.16 per cent at 89.874 in late trading.