Gold rose to a one-week high on Friday as the dollar retreated from recent highs but bullion was headed towards its worst quarter since March last year, buckling under fears of impending large interest rate hikes by the U.S. Federal Reserve. Spot gold was 0.1% higher at $1,661.89 per ounce by 1:45 p.m. EDT (1745 GMT) and gained 1.1% so far this week. "The gold market's at an area where we can see some movement higher... (but) that's all dependent on what the dollar does and rates going into the weekend," said Daniel Pavilonis, senior market strategist at RJO Futures.
Gold prices rebounded from a 2-1/2-year low on Tuesday as a slight pause in the dollar rally helped restore greenback-priced bullion's allure, although risks from looming rate hikes persisted. Spot gold was 0.5% higher at $1,629.69 per ounce by 1:46 p.m. EDT (1746 GMT), after climbing over 1% to $1,642.29 earlier in the session. "Today is just a little bit of a recovery after some of the extreme weakness seen over recent days ... but I don't think there's really any fundamental change taking place in the gold market," said Ryan McKay, commodity strategist at TD Securities.