Gold was steady and set for a second weekly gain on Friday, bolstered by the U.S. Federal Reserve’s caution on an interest rate rise and worries over Greece, but a recovering dollar capped the gains.
Spot gold was up 0.1 percent at $1,202.47 an ounce by 1331 GMT, after a 1.3 percent rise on Thursday, its biggest daily increase since mid-May. Prices are up 1.8 percent this week so far, the biggest weekly increase in over a month.
“The boost that gold got from a more dovish Fed this week slightly improves the technical picture, leaving $1,225 as the next biggest resistance level,” ActivTrades chief analyst Carlo Alberto de Casa said.
Gold hit a three-week high on Thursday on a softer dollar after Fed policymakers said a rate increase would be appropriate only after further improvement in the labour market and greater confidence that inflation would rise.
“The rate move, a stronger dollar and the re-pricing of the U.S. yield curve will limit any upside,” Danske Bank senior analyst Jens Pedersen said.
Non-interest-paying gold has benefited from a record-low rate environment following the 2007-2009 credit crisis. Higher rates would increase the opportunity cost of holding the metal.