AP
Gold slipped almost two percent to a near six-year low on Friday and was heading for a sixth straight weekly decline under pressure from a firm dollar and prospects of a U.S. interest rate rise next month.
Spot gold hit $1,052.46 an ounce, its lowest since February 2010, and was last down 1.2 percent at $1,058.30.
Spot prices were down 2.1 percent for the week. U.S. gold futures fell 1.2 percent to $1,057 an ounce and were also headed for a sixth consecutive weekly decline.
Gold was undermined by a firm dollar, trading at an eight-month high against a basket of major currencies, mostly boosted by euro and Swiss franc weakness.
The dollar-denominated metal becomes more expensive for foreign investors when the U.S. currency rises.
"Since 2012 we have been in an environment where lower real rates and higher equity risk premium have both been strong and negative factors for gold," Deutsche Bank analyst Michael Hsueh said.
"And, although entering a mature phase, the dollar appreciation cycle is not done yet, and that will also be a negative driver for gold."
The Federal Reserve is widely expected to raise U.S. rates for the first time in nearly a decade when it meets next on Dec. 15-16. Higher rates would rise the opportunity cost of holding non-yielding gold and could dent demand and boost the dollar.
"The omens are not positive for gold in the lead-up to the December rate meeting," Societe Generale analyst Robin Bhar said.
Buying in China has been good but has been unable to support prices, traders said.
Premiums on the Shanghai Gold Exchange, a proxy for demand in China, were trading at $5-$6 an ounce, versus $3-$4 at the beginning of the month.
However, other physical demand indicators were not upbeat.
India's gold buying in the key December quarter is likely to fall to the lowest level in eight years, hurt by poor investment demand and back-to-back droughts that have slashed earnings for the country's millions of farmers.
China's net gold imports from main conduit Hong Kong fell in October from a 10-month high reached in the previous month, data showed on Thursday.
Precious metals funds posted their biggest net outflow last week in around four months, according to Bank of America Merrill Lynch.
In other precious metals, silver, platinum and palladium were all heading for weekly declines. Silver was down 1.2 percent at $14.08 an ounce, platinum was down 2.1 percent at $831.74, not far off a seven-year low hit earlier in the week and palladium dropped 1.4 percent to $547.50.
Patrick Abboud
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