NEW YORK: Gold prices fell more than 1% on Friday and were headed for their worst week since mid-August, dragged lower by a stronger US dollar and worries the Federal Reserve will persist with sharp rate hikes to curb inflation.

Spot gold had fallen 1.3% to $1,643.90 per ounce by 13:42 p.m. EDT (1742 GMT), down about 2.9% so far this week. US gold futures settled 1.6% lower at $1,649.50.

The US dollar rose over 0.6% against its rivals, making greenback-priced bullion more expensive for overseas buyers.

Gold prices are increasingly correlated with the moves in the dollar and could fall to as low as $1,600 an ounce, said Daniel Ghali, commodity strategist at TD Securities.