NEW YORK: Gold dipped on Friday in a volatile week that saw bullion prices north of the key $2,000 figure as bank contagion fears bolstered both safe-haven demand and bets on a pause in Federal Reserve rate hikes.

The US dollar rose about 0.5%, making the greenback-priced gold more expensive among overseas buyers on Friday.

Spot gold fell 0.8% to $1,977.01 per ounce by 2:34 p.m. EDT (1834 GMT), after it rose to $2,002.89 earlier in the session. US gold futures slipped 0.6% to settle at $1,983.80.

A somewhat firmer dollar and a rebound in equity markets and risk appetite are probably what has driven gold lower, said Bart Melek, head of commodity markets strategy at TD Securities. But bullion was likely to get continued support from big macro developments, Melek said.

Rescue measures for struggling banks eased contagion fears earlier in the week, putting gold on course for its first weekly decline in four, down about 0.5%, despite having climbed to its highest in a year above $2,000 on Monday. But banking shares were trounced again on Friday, with European giants Deutsche Bank and UBS knocked by worries that regulators and central banks have yet to contain the worst shock to the sector since the 2008 financial crisis.

“Any concern that pops up about US banks being undercapitalized is going to be a factor for gold to rise,” said Bob Haberkorn, senior market strategist at RJO Futures.

Fed officials said there was no indication financial stress was worsening as they gathered at a policy meeting this week, a fact that allowed them to stay focused on lowering inflation with another interest rate increase.