Gold prices slipped on Friday as a cocktail of factors from a robust dollar and elevated U.S. bond yields to worries around more interest rate hikes by the U.S. Federal Reserve weighed on sentiment.
Spot gold was down 0.4% at $1,664.39 per ounce by 0822 GMT and was heading for its second straight weekly decline, down 0.6%. U.S. gold futures fell 0.5% to $1,672.10.
"The renewed strength of the dollar is pushing gold lower. The gold market's short-term outlook is still challenged by the market looking for a peak in the dollar and especially in the yields," said Ole Hansen, head of commodity strategy at Saxo Bank.
"However, gold is not collapsing amid all these major headwinds, and the main reason for that is the geopolitical concerns adding some support to the price. Also, the word is rapid rising interest rates would trigger an economic slowdown."
The dollar index rose to a new two-decade high against its rivals, making gold less appealing for other currency holders.
Benchmark 10-year U.S. Treasury yields hit an 11-year peak. A number of central banks including the Fed and the Bank of England have raised interest rates this week to tame inflation and also stoked concerns of a global recession. While gold is considered a safe investment during political and financial uncertainties, rising rates dull its appeal since it yields no interest.
"There was also some safe-haven buying as the war in Ukraine escalated. Nevertheless, the relentless rise in rates remains a headwind for gold," said Soni Kumari, a commodities strategist at ANZ.
"We are expecting gold prices to fall towards $1,620 per ounce level and below $1,600 per ounce." Russian President Vladimir Putin on Wednesday announced partial mobilisation, which reignited some safe-haven interest in bullion.
Spot silver fell 1% to $19.46 per ounce and palladium was down 2.4% to $2,117.36.
Platinum dipped 1.5% to $886.54 and was down 2.3% for the week.
(Reporting by Brijesh Patel in Bengaluru; Editing by Jan Harvey)