Gold jewelry on display in a shop window in the Gold Souk in the Deira district of Dubai, United Arab Emirates Image Credit: Bloomberg

Gold prices were steady on Friday, headed for their second straight weekly decline, with worries over major central banks potentially implementing big interest rate hikes to target runaway inflation weighing on appetite for bullion.

Spot gold was flat at $1,823.20 per ounce by 5.13am UAE, after hitting a one-week low of $1,820.99 earlier in the session. US gold futures fell 0.3 per cent to $1,823.80.

Gold prices have dropped about 0.9 per cent this week.

The US Federal Reserve’s commitment to reining in 40-year-high inflation is “unconditional,” its chair Jerome Powell told lawmakers on Thursday, even as he acknowledged that sharply higher interest rates may push up unemployment.

Stocks in global markets rose on Thursday, as US Treasury yields fell to two-week lows, while copper was at 16-month lows as investors worried about a possible global economic slowdown.

Yields on the benchmark US 10-year Treasury note, however, firmed on Friday, pressuring demand for gold.

Higher interest rates and bond yields raise the opportunity cost of holding bullion, which yields no interest.

The dollar steadied after an uptick in the previous session, making greenback-priced gold less attractive for buyers holding other currencies.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.81 per cent to 1,063.07 tonnes on Thursday from 1,071.77 tonnes a day earlier.

Spot silver dipped 0.1 per cent to $20.92 per ounce, and platinum rose 0.6 per cent to $912.00, but both were set for weekly losses.

Palladium, however, climbed 1.1 per cent to $1,863.62, and has gained about 3 per cent this week.