BENGALURU Gold prices slipped on Friday due to a stronger dollar, although they were set for a fourth weekly gain in five, as the US Federal Reserve's (Fed) decision to retain its interest rate-cut projections for 2024 bolstered bullion's appeal.

Spot gold was down 0.4% at US$2,173.17 per ounce as of 0607 GMT. Bullion has risen 0.8% so far this week.

US gold futures fell 0.5% to US$2,174.60 per ounce.

The dollar advanced to a three-week high against its rivals, and was on track for a second weekly rise, making greenback-priced gold more expensive for other currency holders.

"Impending rate cuts are generally supportive of gold prices and provide a floor for the yellow metal once the rate-cutting process comes into effect," IG market strategist Yeap Jun Rong said.

"For now, it seems that gold is in extreme overbought conditions, which may call for some near-term cooling in its recent rally, with further downside to leave the US$2,148 level on watch as immediate support to hold."

On Thursday, gold prices rose to an all-time high after Fed policymakers indicated that they still expect to reduce rates by three-quarters of a percentage point by the end of 2024 despite recent high inflation readings.

Fed chair Jerome Powell on Wednesday said recent high inflation readings had not changed the overall story of slowly easing US price pressures.

Gold, which pays no interest, tends to benefit when interest rates fall, as this reduces the opportunity cost of holding bullion.

Fed funds futures traders are now pricing in a 74% probability that the Fed will begin cutting rates in June, according to the CME Group's FedWatch Tool.

Spot silver dropped 1% to US$24.52 per ounce, platinum fell 0.8% to US$900.85, and palladium lost 1.8% to US$992.11. All three were on track for a weekly fall.

  - Reuters