By Zandi Shabalala
LONDON: Gold fell more than 1 percent on Friday, snapping a week-long streak of gains following conflicting signals from U.S. Federal Reserve officials on the timing of a possible rate hike, but was still on track to end the week higher.
Spot gold fell as much as 1.5 percent to a session low of $1,337.37 per ounce, paring losses by 1416 GMT to trade down 0.44 percent at 1,345.90. The yellow metal was still heading for a weekly gain of around 0.7 percent.
U.S. gold dropped 0.68 percent to $1,347.80 an ounce.
Gold is sensitive to higher rates which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
There have been mixed signals this week from Federal Reserve policymakers, leaving the market anticipating more direction at next week's annual meeting of central bankers from around the world in Jackson Hole, Wyoming, at which Fed Chair Janet Yellen is seen likely to cement expectations for a slow pace of rate increases.
"We have had conflicting statements from the Fed and its created quite a lot of confusion as to the thinking, so now the market is waiting to hear what Yelland's thoughts on the world and economic growth," Ole Hansen, head of commodity strategy at Saxo Bank.
"Overall the market is in wait-and-see mode ahead of next week Thursday’s meeting."