* U.S. consumer prices post first drop in 9 months
* Gold up about 0.3 percent so far this week
* Palladium set for third straight weekly gain
By Swati Verma
BENGALURU, Jan 11 (Reuters) - Gold edged higher on Friday and was
on track for its fourth successive weekly gain, as U.S. stocks slipped
and expectations rose that the U.S. Federal Reserve might halt its
monetary policy tightening cycle.
Spot gold was up 0.2 percent at $1,288.47 an ounce by 1:52 p.m.
EST (1852 GMT). U.S. gold futures settled 0.2 percent higher at $1,289.5.
"With equities down slightly heading into the weekend, there
is some flight to safety in gold," said Bob Haberkorn, senior
market strategist at RJO Futures.
An index of world stock markets eased on Friday after a five-day
"The equities are looking a little heavy up at these levels
and yesterday's speech by Fed Chairman Powell felt like Fed might
adopt a dovish stance on rates moving forward, which is lending a lot
of support to gold," Haberkorn added.
Fed Chairman Jerome Powell said on Thursday the U.S. central bank
could be patient on rate policy.
Data on Friday showed U.S. consumer prices fell for the first time
in nine months in December, which likely supports recent remarks by
several policymakers, including Powell, for caution about raising
interest rates this year.
Gold tends to gain on expectations of lower interest rates, as
they reduce the opportunity cost of holding non-yielding bullion.
"Recent inflation data from around the globe points to a
tamer outlook on rising prices in the coming months," Jim
Wyckoff, senior analyst at Kitco Metals, wrote in a note.
"That should allow world central banks to be less hawkish on
their monetary policies, which would be a bullish element for the
precious metals markets."
Gold is up about 0.3 percent for the week, mainly supported by a
weaker dollar, which slipped to about three-month lows on Thursday
against the backdrop of dovish views from the Fed and a de-escalation
in the U.S.-China trade dispute.
U.S. officials expect China's top trade negotiator to visit
Washington this month after this week's talks with mid-level officials
"The $1,300 resistance level for gold is looking very
vulnerable. Risk aversion has been supportive, but as we're seeing
now, its primary driver is the dollar," said OANDA senior market
analyst Craig Erlam.
Among other precious metals, palladium was down 0.2 percent at
$1,319.50 an ounce, and was up about 1.4 percent for the week.
Platinum slipped 0.7 percent to $814.10 and ounce and was down
over 1 percent for the week.
Silver gained 0.3 percent to $15.61 an ounce. But it was on
track to record a weekly decline after rising for three weeks.
(Reporting by Swati Verma and Eileen Soreng in Bengaluru Editing by
((Swati.Verma@thomsonreuters.com; +1-651-848-5832, outside N.America,
+91-80-6749-6356/1298; Reuters Messaging: email@example.com))