Gold prices rises on softer dollar

Gold prices rose on Friday helped by a dip in the dollar, but expectations of more interest rate hikes capped further gains as U.S. Federal Reserve Chair Jerome Powell reiterated the central bank's commitment to tame inflation.

FUNDAMENTALS

* Spot gold rose 0.4% to $1,713.62 per ounce as of 0110 GMT.


* U.S. gold futures were up 0.3% at $1,724.90.

* The dollar index was down 0.3%, having hit its lowest level in a week, making the greenback-priced bullion less expensive for those holding other currencies.

* The Fed is "strongly committed" to fighting inflation and remains hopeful that can be done without the "very high social costs" involved in prior campaigns to control surging prices, Powell said on Thursday. His remarks were echoed by other policymakers.

* The U.S. central bank is expected to raise the fed funds rate by another 75 basis points on Sept. 21.

* Higher interest rates increase the opportunity cost of holding the non-yielding bullion and boosts the dollar.

* The number of Americans filing new claims for unemployment benefits fell last week to a three-month low, underscoring the robustness of the labor market.

* The European Central Bank raised its key interest rates by an unprecedented 75 basis points on Thursday and promised further hikes, to combat inflation even as the bloc is likely heading towards a winter recession and gas rationing.

* Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.30% to 968.15 tonnes on Thursday from 971.05 tonnes on Wednesday.

* Spot silver gained 0.5% to $18.66 per ounce, platinum rose 0.1% to $880.27 and palladium fell 0.5% to $2,127.57.

DATA/EVENTS (GMT)

0130 China PPI, CPI YY Aug

1600 US The Federal Reserve issues quarterly financial accounts of the United States