Gold extended its retreat to fall 1% on Friday en route to a third straight weekly dip as a stronger dollar and prospects of higher interest rates eroded its appeal, with an import tax hike by India also seen dampening demand for bullion.
Spot gold was down 0.9% at $1,790.47 per ounce by 1048 GMT, while U.S. gold futures dipped 0.9% to $1,790.50.
Coming off its worst quarter since early 2021 amidst aggressive monetary policy from top central banks, non-interest bearing gold has lost about 2% so far this week, with a stronger dollar heaping on further pressure.
The European Central Bank is also likely to start raising rates this month. "Despite the current risk-off mood and with financial markets a 'sea of red', the go-to safe haven just now is the U.S. dollar", rather than precious metals, independent analyst Ross Norman said.
Norman said the "very significant" increase in import duties in India had also hurt prices. India, the world's second biggest bullion consumer, has raised its basic import duty on gold to 12.5% from 7.5% in a bid to bring down the trade deficit.
India increasing the import duty will immediately affect demand even though the third quarter usually sees strong physical buying due to festivals, said Ajay Kedia, director at Kedia Commodities in Mumbai. Gold's retreat came despite data showing euro zone manufacturing production fell last month for the first time since the initial wave of the COVID-19 pandemic two years ago.
Spot silver fell 2.6% to $19.73, and has dropped about 6.6% this week, its biggest weekly fall since Jan. 2022. Silver seems unable to find any footholds, with each week bringing fresh declines, Rupert Rowling, market analyst at Kinesis Money, said.
Spot platinum slipped 1.3% to $881.96 per ounce, and faces a fourth consecutive weekly fall. Palladium was down 1.7% at $1,904.55, but has gained about 1.4% this week.
(Reporting by Arundhati Sarkar and Ashitha Shivaprasad in Bengaluru; Editing by Edmund Blair and Jan Harvey)