LONDON: Gold prices eased on Friday and were on track to end the week lower as the dollar advanced on expectations of higher interest rates and the view that global political and security risks were easing.

Spot gold was down 0.3 per cent at $1,340.66 an ounce by 1157 GMT, while US gold futures fell 0.5 per cent to $1,342.30 per ounce. Spot gold is heading for its first weekly decline this month.

Market jitters over Western missile strikes in Syria that provided some support to gold this week eased, while the geopolitical outlook on the Korean Peninsula brightened as US

President Donald Trump said on Wednesday he hoped a summit with North Korean leader Kim Jong Un would be successful.

“Of course, the geopolitical risks are still high compared to the beginning of the year but it seems like they are slightly lower than a few days ago so prices have come off the boiler a bit,” Capital Economics commodities economist Simona Gambarini said.

Gold is often used as safe haven in times of uncertainty.

Adding further pressure on bullion, a US central banker said the Federal Reserve should keep raising interest rates this year and next to keep the economy from overheating and financial stability risks from rising.

Higher rates dent the appeal of non-interest yielding bullion while lifting the dollar, in which it is priced. The dollar index gained 0.2 per cent against a basket of major currencies.

Investors were also relieved that no new US demands on trade came out of a summit between Japanese Prime Minister Shinzo Abe and Trump.

“The uncertainty over geopolitical risk and trade war tension has moved to the back burner this week and has made for a less compelling argument in the gold market,” APAC trading head at OANDA Stephen Innes said.

“Traders are rehashing old topics amidst reasons to stay long into the weekend, but drawing few if any conclusions.”

Also, the relatively optimistic backdrop in the United States should support the Fed in raising interest rates at least twice more this year, traders and analysts have said.

Meanwhile, Bank of England Governor Mark Carney on Thursday acknowledged the recent mixed domestic economic readings, which reinforced the view the BoE would raise rates gradually over the next few years.

Among other precious metals, spot silver was down 0.6 per cent at $17.10, after hitting a more-than 2-1/2-month high at $17.35 in the previous session.

Platinum fell 0.2 per cent to $931. It touched a more-than three-week high at $953.50 in the previous session.

Palladium slipped 0.5 per cent to $1,020.10. It hit 1-1/2-month high of $1,057.20 on Thursday.