Gold prepares for weekly drop amid expected sharp U.S. interest rate hike

Gold prices rose on Friday as the dollar and Treasury bond yields fell, with the prospect of a sharper U.S. Federal Reserve rate hike keeping gold on a downward trend for the week.

Stephen Innes, managing partner at SPI Asset Management, said that the gold price is in a tight spot right now due to the fact that there are no near-term changes, but there is a prospect that the Fed may pause the rate hike. He added that from a medium-term perspective, gold is more likely to rise than it is to fall. Economies around the world are going to be adverse, which could eventually lead to a decline in rates.

Traditionally, gold has been seen as a hedge against inflation and other economic shocks, but rising interest rates to control skyrocketing prices have reduced the metal's popularity because it is virtually unprofitable.

According to Reuters technical analyst Wang Tao, spot gold looks neutral in a range of $1,660 to $1,674 an ounce, and the pullback could indicate direction.