Gold faces weekly dip as recent rally subsides on hawkish Fed

Nov 18 (Reuters) – Gold was headed for a weekly fall on Friday as the recent rally fizzled after several US Federal Reserve officials suggested that interest rates would continue to rise, pouring cold water on market expectations that the US central bank would pivot.

FUNDAMENTALS

* Spot gold was steady at USD 1,761.29 per ounce, as of 0017 GMT. US gold futures were flat at USD 1,763.40 per ounce.

* Bullion is on track for a weekly decline of about 0.6%, despite surging to its highest level since mid-August on Tuesday.

* After months of decline, prices of bullion shot up as markets bet that US interest rate hikes will slow, but analysts said institutional investors are wary and further gains could be elusive.

* Even under a “generous” analysis of monetary policy, the Fed needs to keep raising interest rates given that its tightening so far “had only limited effects on observed inflation,” St. Louis Fed President James Bullard said on Thursday.

* Minneapolis Fed Bank President Neel Kashkari said the US central bank should not stop rate hikes until it’s clear that inflation has peaked.

* High interest rates discourage investing in gold, which does not bear any interest.

* Swiss gold exports to China and Turkey remained strong in October while shipments to India fell, Swiss customs data showed on Thursday.

* Nornickel is looking for alternative ways to deliver Russian raw materials to its Finnish Harjavalta plant starting from 2023 as Finnish railway operator VR is due to stop providing this service to it in six weeks. Nornickel is the world’s largest palladium producer.

* Spot silver rose 0.2% to USD 20.98 per ounce, platinum gained 0.5% to USD 985.41 and palladium added 0.5% to USD 2,015.12. All were, however, on course to end the week lower.

DATA/EVENTS (GMT)

0700 UK Retail Sales MM, YY

0700 UK Retail Sales Ex-Fuel MM

1500 US Existing Home Sales

(Reporting by Swati Verma in Bengaluru; Editing by Sherry Jacob-Phillips)