- Gold down about 1.7% so far this week
- Iran vows to keep Strait of Hormuz closed
- Delayed US January PCE data due later today
March 13 (Reuters) - Gold was on track for a second straight weekly loss, even as it edged higher on Friday, as surging oil prices dampened rate cut bets and caused investors to cover margin calls, while a rising dollar and U.S. yields also pressured prices.
Spot gold was up 0.2% at $5,087.61 per ounce, as of 0927 GMT, but was set for a 1.7% weekly drop. U.S. gold futures for April delivery fell 0.16% to $5,092.60.
"Gold is being used (as) a way of getting quick cash when you've got losses elsewhere given equity markets have been soft, while oil above $100 also increases expectations for further inflationary pressures and by extension a rollback in rate cuts," said independent analyst Ross Norman.
Iran vowed to keep the Strait of Hormuz closed, stoking global energy supply and risk asset concerns. Asian equities were heading for a second straight weekly loss as the U.S.-Israeli war on Iran neared the two-week mark with drone and missile strikes across the Middle East.
Oil prices, as a result, headed for weekly gains, despite the U.S. trying to ease supply concerns by issuing a 30-day license for countries to buy Russian oil and the IEA agreeing to release a record 400 million barrels from strategic stockpiles, which includes a 172-million-barrel U.S. contribution.
While recent inflation data suggest price growth is under control, the spike in crude prices has yet to filter through. Investors await the release of delayed January Personal Consumption Expenditures figures later on Friday.
Traders expect the Federal Reserve to keep rates steady at its two-day meeting next week, CME Group's FedWatch tool shows.
The dollar rose to a three-month high while 10-year U.S. Treasury yields were at a near six-week high.
"The dollar is being seen as the go-to safe haven which means gold weakness, though (bullion) should remain well supported north of $5,000," Norman added.
Spot silver fell 1.3% to $82.66 per ounce. Platinum lost 2.3% to $2,081.25 and palladium shed 0.7% to $1,605.90.
Reporting by Ishaan Arora in Bengaluru; Editing by Sherry Jacob-Phillips, Harikrishnan Nair and Alexander Smith
Source: Reuters