Gold set for first weekly gain in three on Fed pause bets

Nov 17 – Gold prices rose slightly on Friday, on track for their first weekly gain in three, as investors grew confident that the U.S. Federal Reserve is done raising interest rates, sending the dollar and Treasury yields lower.

Fundamentals

* Spot gold was up 0.2% at USD 1,984.26 per ounce, as of 0059 GMT, after hitting its highest since Nov. 6 in the last session. US gold futures were steady at USD 1,987.

* Bullion is up 2.5% so far this week.

* The dollar was on track for a weekly drop, making gold less expensive for buyers holding other currencies, while yields on 10-year Treasury notes hovered near two-month lows.

* The number of Americans filing new claims for unemployment benefits increased more than expected last week, which could help the Fed’s fight against inflation.

* On Tuesday, data showed US headline consumer prices were flat in October, against expectations for a 0.1% rise. Core CPI, at 0.2%, came in below a forecast of 0.3%.

* The slowing jobs market and weaker-than-expected consumer inflation data prompted market participants to revise their forecasts for future Fed action.

* Traders now widely expect the Fed to leave rates unchanged at its Dec. 12-13 policy meeting, according to the CME FedWatch tool.

* Lower interest rates decrease the opportunity cost of holding gold.

* Spot silver rose 0.6% to USD 23.83 per ounce, while platinum was flat at USD 892.58. Palladium eased 0.2% to USD 1,035.77 per ounce.

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)