Gold falls more than 1% as dollar surges

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Gold falls more than 1% as dollar surges

On Friday, gold fell more than 1%, and is poised for its fourth straight week decline as the dollar's strong run with more aggressive U.S. interest rates sapped appetite for bullion.

Spot gold fell 0.7% to $1,808. 89 per ounce was reached by 01: 54 p.m. ET 1754 GMT, after hitting its lowest since February 4 at $1,798. It has declined nearly 4% this week.

The U.S. gold futures settled down 0.9% at $1,808. On Thursday, U.S Federal Reserve Chair Jerome Powell said that the battle to control inflation would include some pain as the impact of higher interest rates is felt.

David Meger, director of metals trading at High Ridge Futures, said that gold is being weighed down as the Fed has been committed to raise interest rates at a fast pace and the dollar has been extremely strong.

The inflation numbers are what the market will watch as they go forward. The dollar index was set for a sixth consecutive week of gain, hovering near a 20 year high.

Although viewed as an inflation hedge, bullion yields no interest and is sensitive to rising U.S. short-term interest rates and bond yields.

A rebound in global stock markets with less risk aversion in the marketplace to end the trading week is a negative for the safe-haven metals, said Jim Wycoff, senior analyst at Kitco.

Spot silver went up 1.6% to $20.98 per ounce, but it has fallen about 6% this week, the most since late January.

Platinum fell by 0.8% to $936.51. Palladium rose by 1.5% to $1,936. 83, after falling over 8% on Thursday.

Concerns about Russia's supply disruption take precedence over the palladium market, and there is active buying into dips as prices have come down dramatically, Meger said.