* Dollar heads for best week in 9 months
* Commerzbank maintains $2,000/oz gold price year-end
* Palladium set for biggest weekly fall since March 2020
(Recasts, adds comment, updates prices)
By Nakul Iyer
June 18 (Reuters) – Gold struggled for direction in choppy
trading on Friday en route to its worst week in nine months as
the dollar resumed its rally while investors took stock of the
U.S. Federal Reserve’s hawkish outlook.
Spot gold edged 0.2% down to $1,770.60 per ounce by
10:28 a.m. EDT (1428 GMT), stalling an initial uptick on some
bargain buying. Prices were down 4.5% for the week, having slid
over 2% on Thursday.
U.S. gold futures fell 0.1% to $1,774.00.
Palladium was poised for its biggest weekly fall since March
2020, while silver was down 6.9% for the week.
Palladium was last up 0.3% at $2,529.66 per ounce,
while silver was little changed at $25.93 and platinum
dropped 0.6% to $1,052.18.
The Fed on Wednesday said it would consider whether to taper
its asset purchase programme in every subsequent meeting and
brought forward projections for interest rate hikes into 2023.
Traders also digested St. Louis Fed President James
Bullard’s comments that faster monetary tightening was a
“natural” response to faster than expected economic growth and
“Markets are fearful of further Fed jawboning,” said David
Meger, director of metals trading at High Ridge Futures.
It remains to be seen “how much Fed talk we’re going to get
on potentially reducing asset purchases and raising interest
rates at some point down the road, if these forecasts ring true”
The dollar index was headed for its best week in
nearly nine months, denting gold’s allure for other currency
But some analysts, including from Goldman Sachs and
Commerzbank said gold could be set for a recovery.
“In a now familiar pattern, the recent gold move has
outpaced both the move in the dollar and in real rates,
indicating it is due for an upward price reversal in coming
weeks,” Goldman Sachs said in a note.
Commerzbank also kept its $2,000 an ounce year-end forecast
(Reporting by Arundhati Sarkar, additional reporting by Arpan
Varghese in Bengaluru; Editing by Marguerita Choy and Alexander