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May 13 (Reuters) – Gold prices on Friday were held near a three-month low as the strongest dollar in two decades continued to sap demand for greenback-priced bullion, setting up what could be the metal’s fourth consecutive weekly fall.

FUNDAMENTALS

* Spot gold XAU= was down 0.1% at $1,820.54 per ounce, as of 0054 GMT, having dropped to its lowest since Feb. 7 earlier in the session. U.S. gold futures GCv1 fell 0.2% to $1,821.20.

* Bullion is on course for a 3.2% weekly drop, its biggest in two months.

* The dollar =USD steadied near a fresh 20-year high scaled on Thursday as concerns persisted that U.S. central bank’s actions to drive down high inflation would crimp global economic growth, boosting the currency’s safe-haven appeal.USD/

* The elevated dollar drove rival safe-haven gold and other precious metals lower in the previous session, with palladium shedding more than 8%.

* Benchmark U.S. 10-year Treasury yields edged higher on Friday, arresting a four-session slide, and piling on pressure on zero-yield gold. US/

* Calling stable prices the “bedrock” of the economy, Federal Reserve Chair Jerome Powell said on Thursday the U.S. central bank’s battle to control inflation would “include some pain” as the impact of higher interest rates is felt, but that the worse outcome would be for prices to continue speeding ahead. nL2N2X433H nL2N2X419C

* Although seen as an inflation hedge, bullion is sensitive to rising U.S. short-term interest rates and bond yields, which raise the opportunity cost of holding it.

* Spot silver XAG= was up 0.5% at $20.76 per ounce, but set for a fourth consecutive weekly fall, having lost about 6.9% so far this week.

* Platinum XPT= gained 0.8% to $951.50, and palladium XPD= rose 1.4% to $1,934.36, but were set for weekly losses of about 1.2% and 5.2%, respectively.

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Sherry Jacob-Phillips)

((BharatGovind.Gautam@thomsonreuters.com; +91-80-6182-3021/ 3590 (If within U.S. call 651-848-5832 );))

By Sonali Paul

MELBOURNE, May 13 (Reuters) – Oil prices firmed in early trade on Friday but were headed for their first weekly losses in three weeks as worries about inflation and China’s COVID lockdowns slowing global growth outweighed concerns about dwindling fuel supply from Russia.

Brent crude LCOc1 futures were up 97 cents, or 0.9%, at $108.42 a barrel at 0008 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 futures climbed $1.00, or 0.9%, to $107.13 a barrel.

Both benchmark contracts were, however, on track to post declines for the week, with Brent set to drop more than 3% and WTI more than 2%.

The market is continuing to be pushed and pulled by the prospect of a European Union ban on Russian oil sapping supply and concerns about demand being dented by weaker global growth, inflation and China’s COVID curbs.

“The demand concern factors have grown quite a bit,” said Commonwealth Bank commodities analyst Vivek Dhar.

Inflation and aggressive rate rises have driven the U.S. dollar to 20-year highs, which has capped oil price gains because the strong dollar makes oil more expensive for buyers holding other currencies.

Analysts, however, continue to focus on the prospect of a European Union ban on Russian oil, after Moscow imposed sanctions this week on European units of state-owned Gazprom and after Ukraine stopped a gas transit route.

“Oil is finding support from supply concerns as Russia takes another step forward to weaponize energy,” said SPI Asset Management managing partner Stephen Innes.

An International Energy Agency report on Thursday highlighted the duelling factors in the market, saying rising oil production in the Middle East and the United States and a slowdown in demand growth are “expected to fend off an acute supply deficit amid a worsening Russian supply disruption”. nL5N2X431I

The agency said it saw output from Russia falling by nearly 3 million barrels per day (bpd) from July, or about three times more than is currently displaced, if sanctions for its war on Ukraine are expanded or if they deter further buying.

(Reporting by Sonali Paul; Editing by Bradley Perrett)

((Sonali.Paul@thomsonreuters.com; +61 407 119 523))

TOKYO, May 13 (Reuters) – Japanese Finance Minister Shunichi Suzuki said on Friday it was inappropriate to guide fiscal policy on the assumption the central bank will keep buying government bonds indefinitely.

“The Bank of Japan is buying government bonds as part of its monetary policy efforts to achieve its inflation target,” Suzuki told a news conference.

Japanese policymakers have scrambled to reassure markets the government was not forcing the BOJ to bankroll public debt, after former premier Shinzo Abe on Monday described the central bank as a government “subsidiary” that can fund its spending indefinitely. nL3N2X2253

(Reporting by Leika Kihara; Editing by Tom Hogue)

((leika.kihara@thomsonreuters.com; +813-6441-1828; Reuters Messaging: leika.kihara.reuters.com@reuters.net))