NEW YORK (CNBC) - Gold inched higher and was poised for a second weekly gain on Friday, as a softer dollar provided some respite against higher U.S. bond yields and rising expectations that central banks could begin easing economic support.
Spot gold rose 0.1% to $1,785.00 per ounce by 0216 GMT. U.S. gold futures edged 0.2% higher to $1,786.00.
Bullion prices were en route to a second week of gains, aided by a weaker dollar which was set to decline this week.
Bullion prices have traded in a broad $1,749-$1,800 range so far this month, with a steep rally in U.S. benchmark 10-year Treasury yields limiting its upside.
The U.S. Federal Reserve should let its $8 trillion balance sheet reduce over the next couple of years, Fed Governor Christopher Waller said on Thursday.
Atlanta Fed President Raphael Bostic also said he expects high inflation to persist into 2022 and the U.S. central bank should raise interest rates by the end of next year.
The Bank of Japan is discussing phasing out a Covid-19 loan program if infections in the country continue to dwindle, sources told Reuters, potentially setting the bank up to exit a key crisis-mode policy sooner than investors expect.
Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes push government bond yields up, translating into a higher opportunity cost for holding bullion which pays no interest.