NEW YORK: Gold retreated on Friday and was set to post a weekly decline after robust US jobs data drove the dollar higher and bolstered bets that the Federal Reserve would aggressively raise rates.

Spot gold fell 0.7% to $1,924.16 per ounce by 10:44 a.m. ET (1444) GMT. US gold futures dropped 1.3% to $1,928.00.

Bullion was en route to post a drop of 1.7% for the week.

US job data showed the unemployment rate falling to a new two-year low of 3.6% and wages re-accelerating, positioning the Fed to raise interest rates by a hefty 50 basis points in May.

The data powered gains in benchmark US 10-year Treasury yields and the dollar, making gold less appealing for overseas buyers.

Expectations for a rate hike are driving gold lower, said Bart Melek, head of commodity strategies at TD Securities, as that would translate into higher opportunity cost of holding non-yielding gold.

However, he added that “(Fed) policy has a long way to go to be even neutral... and gold is going to continue to be fairly firm.”

Meanwhile, negotiations aimed at ending the five-week war between Russia and Ukraine were set to resume even as Ukraine braced for further attacks.

“While geopolitical crises do not last forever, we expect the secondary impacts of the Russia-Ukraine crisis to provide a strong level of support for gold prices this year,” ANZ said in a note.

Platinum rose 0.7% to $989.79, while palladium gained 1.4% to $2,292.52. However, both metals were on course for a fourth consecutive weekly loss.

“In the near term we could see a tighter environment in precious group metals, particularly palladium,” Melek said, highlighting a possible “erosion of availability from Russian sources.” Elsewhere, silver 0.61% to $24.62 per ounce, down 3.3% for the week.