Gold rises on dovish Fed minutes, set for weekly gain

Gold climbed about 1 per cent on Friday in a delayed reaction to minutes of the Federal Reserve's last policy meeting that showed the US central bank was in no hurry to hike rates.

Spot gold was up 0.8 per cent at $1,147.56 an ounce by 0632 GMT.

On Thursday, prices had rallied only briefly after the Fed minutes before closing down 0.6 per cent despite a softer dollar.

The minutes pointed to a deeply cautious Fed even before subsequent economic data showed a sharp slowdown in hiring by US employers.

Most policymakers, however, thought the Fed's first rate hike in a decade should still come this year.

"Gold was choppy following the US FOMC minutes that did not give a clear indication of whether or not the Fed is poised to raise interest rates this year," said analysts at ScotiaMocatta, referring to the Federal Open Market Committee.

Asian stocks rose on Friday and the dollar nursed losses as investors pared bets that the central bank will hike interest rates this year given the dovish minutes.

"The tone from the FOMC minutes was slightly more dovish, although this wasn't too surprising," said ANZ.

"Overall, the FOMC still see risks to the downside for US real GDP and inflation forecasts, with recent global growth and financial market developments exacerbating these downside risks."

A delayed rate rise could support non-interest-paying gold, although uncertainty could weigh on prices in the near term.

Gold is up 0.8 per cent for the week, after hitting a near-two-week high earlier in the week.

Among other precious metals, silver was set for a near-4 per cent weekly jump, after hitting a 3-1/2-month high on Wednesday on a softer dollar and expectations of a delay in a US rate hike.

Platinum was on track for a 6-per cent gain for the week, its best weekly performance since September 2012.

The gain follows a drop in prices to a near seven-year low last week, as investors believed the Volkswagen emissions scandal would reduce demand for diesel cars, in which the metal is used in catalysts.

Palladium was headed for its fifth straight weekly gain.