US MIDDAY: gold pares gains

Gold pared early gains in a early trade on Friday, on track to break a nine-day streak lower despite the dollar's extended rally as the precious metal market appeared reluctant to extend losses ahead of the US Federal Reserve meeting next week. Spot gold was up 0.1 percent at $1,154.35 an ounce at 2:23 pm EDT (1823 GMT), in technically oversold territory on the 14-day relative strength index at 25.6.
US gold for April delivery settled up 50 cents at $1,152.40 an ounce. The metal was headed for its sixth weekly loss in the past seven, down 1 percent so far and having hit its lowest in more than three months at $1,147.10 on Wednesday. "It's almost like it's confused. It looks like it's trying to find itself," said Teddy Sloup, senior market strategist for iiTrader in Chicago.
Gold has taken a beating since a stronger-than-expected US jobs report last week stoked speculation the Federal Reserve would raise interest rates soon. The next focus will be the Fed's policy-setting committee meeting on March 17-18. "Gold is holding just above this key area of $1,150, but there is more downside risk as the dollar could continue its ascent ahead of next week's Fed meeting, especially as it is so close to parity level with the euro," Saxo Bank head of strategy Ole Hansen said.
The dollar hit its highest in nearly 12 years on Friday and is widely expected to reach parity with the euro, due to the gap between US and European interest rates. A stronger dollar would continue to cloud the outlook for gold, making it more expensive for holders of other currencies, while higher interest rates usually dent demand for assets that do not pay interest such as bullion.
In a reflection of bearish sentiment, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.28 percent on Thursday to 750.95 tonnes, the lowest since January. It had been three weeks since the fund saw any inflows. Other precious metals have also taken a hit. Silver, which was on track for a second straight weekly fall, was down 0.3 percent at $15.52 an ounce, while palladium was heading for its worst week since mid-January. Prices were up 0.1 percent at $789 an ounce on Friday. Platinum was flat at $1,111 an ounce, having fallen to its lowest since 2009 at $1,108.50 on Thursday.