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Singapore - Gold retreated after its biggest weekly advance in two months, as the dollar erased losses, dimming the metal’s appeal as an alternative investment.
Bullion for immediate delivery fell 0.2% to $1,334.70 an ounce by 2:42 in Singapore after a 2.1% gain last week, the most since the period to July 29, according to Bloomberg generic pricing.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, pared an intraday decline of 0.2% to trade little changed.
Gold is still headed for a third quarterly gain in what would be the longest rally since 2011, when prices rose to a record. Last week, the Federal Reserve trimmed its projection for rate hikes next year to two from three, while the Bank of Japan shifted the focus of its stimulus from expanding the money supply to controlling interest rates.
"Pledges from the Fed and BOJ to keep monetary policy accommodative are supportive of gold," said Xu Wenyu, an analyst at Huatai Futures Company in Shanghai.
"We recommend that investors remain cautious of price volatility in the near term, while maintaining a bullish stance."
Citigroup Inc. warned that gold may be in for a bumpy ride in the final quarter as Republican candidate Donald Trump now has a 40% chance of winning the presidential election.
The first of three US presidential debates will be held on Monday ahead of the November 8 vote.
Gold assets in exchange-traded funds have expanded every month this year apart from a dip in April.
Holdings were little changed at 2 031 metric tonnes on Friday after rising the previous day to a more than two-week high, data compiled by Bloomberg show.
Bullion of 99.99% purity advanced as much as 0.4% to 287.97 yuan a gram ($1 343 an ounce) on the Shanghai Gold Exchange and was last at 287.09 yuan.
Spot silver fell 0.8%, while platinum and palladium both dropped by 1% or more.
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