Please use symbol entry at top right of page to search

PRECIOUS-Gold eyes fourth straight weekly gain on dollar weakness

       * U.S. 10-year bond yields hover near three-week peak
    * Dollar down 1% so far this week
    * If risk appetite fades, gold could move above $1,800 -
analyst

 (Adds comments and updates prices)
    By Ashitha Shivaprasad
    Aug 12 (Reuters) - Gold prices inched lower on Friday but
were still on track for a weekly rise, as an overall weakness in
the dollar offset pressure from an uptick in bond yields and
expectations of further rate hikes from the U.S. Federal
Reserve.
    Spot gold        was down 0.1% at $1,786.89 per ounce, as of
1057 GMT. Bullion was still headed for its fourth straight
weekly gain, up nearly 1% in its longest weekly rally in almost
a year.
    U.S. gold futures        fell 0.3% to $1,801.10.
    The dollar        edged 0.4% higher on the day, but was down
about 1% for the week. A weaker greenback makes bullion less
expensive for overseas buyers.
    "Inflation easing a little has aided gold's rally to $1,800.
But risk assets were quickly preferred and gold's rally stalled.
If risk appetite fades over the next couple of weeks, that could
support a move above $1,800," OANDA analyst Craig Erlam said.

    Market participants have toned down expectations of an
aggressive rate hike by the Fed after cooler-than-expected
inflation data released earlier this week. However, recent
comments by some Fed officials continue to highlight a hawkish
tilt.
    Gold's appeal tends to dim amid high-interest rate
environment, as the metal yields no interest.
    Fed's Mary Daly said on Thursday that while a
half-percentage-point interest rate hike in September "makes
sense," she is open to the possibility of a bigger hike.

    "The ongoing tightening of monetary policy is still having a
braking effect on gold... Market participants remain
correspondingly cautious and have been withdrawing funds from
the gold ETFs of late," Commerzbank said in a note.
    Weighing on gold, U.S. Treasury yields hovered near a
three-week high.
    Spot silver        fell 0.1% to $20.27 per ounce, palladium
       slipped 0.6% to $2,264.27.
    Platinum        fell 0.8% to $948.74 per ounce.

 (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by
Rashmi Aich and Shinjini Ganguli)

Copyright © Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

News, commentary and research reports are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.