BENGALURU: Gold prices fell on Friday after grazing a record high in the previous session as the dollar firmed, but was set for a weekly gain after the US Federal Reserve said it expected three rate cuts in 2024. Spot gold was down 0.7% at $2,166.20 per ounce as of 1026 GMT.

It was on track for a fourth weekly gain in five, up 0.5% so far. US gold futures fell 0.8% to $2,168.

The dollar advanced to a one-month high, making gold more expensive for other currency holders. While the dollar’s ascent is a burden on gold and precious metals, “the major factor is the medium-term development of Fed cutting its interest rates soon and this is clearly pointing towards lower opportunity costs for holding gold,” said Quantitative Commodity Research analyst Peter Fertig.

Zero-yield gold generally benefits from low interest rates. Traders are pricing in a 71% probability of a June rate cut, according to the CME FedWatch Tool, up from 60% before the rate decision.

Gold prices scaled a new record high for the fifth time this month on Thursday as Fed members said they still planned to cut rates by three-quarters of a percentage point this year, despite recent strong inflation readings.

Gold’s move into overbought territory may call for some near-term cooling in its recent rally, with $2,148 a key immediate technical support level to watch, said IG market strategist Yeap Jun Rong. Investment flows into gold in the week to Wednesday hit their highest in almost a year, while investors pulled funds from cash equivalents and stocks, Bank of America Global Research said. Silver dropped 0.8% to $24.57 per ounce, platinum fell 0.2% to $905.90 and palladium lost 0.3% to $1,007.75. All three were on track for a weekly fall.