PRECIOUS-Dollar gains, Fed rate hike bets dim gold’s lustre

Adds comments and updates prices

By Ashitha Shivaprasad

July 8 (Reuters) – Gold was on course to fall for a fourth straight week on Friday, hurt by the dollar’s ascent and as bets for steep interest rate hikes gained traction after healthy U.S. jobs data.

Spot gold XAU= was little changed at $1,743.69 per ounce by 11:37 a.m. ET (1537 GMT). Bullion has lost nearly 4% so far this week, which would be its worst since mid-May.

U.S. gold futures GCv1 rose 0.2% at $1,743.00.

Lately gold has failed to attract safe-haven flows despite growing recessions risks as investors have instead opted for the dollar, which has marched to fresh two-decade highs. .DXY USD/

“The jobs data pushed down gold, already struggling after such a strong dollar rally. However, there is some bargain hunting coming through in gold here,” said RJO Futures senior market strategist Bob Haberkorn.

U.S. job growth was more than expected in June and the unemployment rate remained near pre-pandemic lows, signalling persistent labour market strength that gives the Federal Reserve ammunition to deliver another 75-basis-point rate increase later this month. nL1N2YO2M6

Higher interest rates sour the appeal of gold by translating into increased opportunity cost of holding the asset since it yields no interest. nS0N2YH08G

“In short-term, we still see gold supported by recession risks. Following the recent correction, we expect prices to consolidate,” said Carsten Menke, head of Next Generation Research at Julius Baer.

“A lasting rebound looks rather unlikely assuming that the Fed is able to fight inflation without pushing the economy into recession.”

In physical markets, demand improved slightly in India after domestic prices eased, while concerns over fresh coronavirus outbreaks kept a leash on activity in top consumer China. nL4N2YP1J8

Spot silver XAG= rose 0.6% to $19.31 per ounce, while platinum XPT= rose 2.6% to $896.31.

Palladium XPD= rose 8.8% to $2,166.84, and was set for its third straight week of gains.

(Reporting by Ashitha Shivaprasad and Arundhati Sarkar in Bengaluru; Editing by Vinay Dwivedi)

((Ashitha.Shivaprasad@thomsonreuters.com;))