Gold edges higher on lower oil prices, subdued dollar

Spot silver XAG= rose 1.1% to $65.91 and was headed for a weekly gain.

Platinum XPT= gained 1.4% to $1,793.15 and palladium XPD= added 1% at $1,303.74.

The Federal Reserve raised interest rates on Wednesday and flagged more hikes in the coming months.

Goldman Sachs kept its end-2027 gold price forecast at $5,400 despite the Fed rate increase, saying tighter policy is likely to slow bullion's rally but not derail it.

Although gold is traditionally viewed as a hedge against inflation, higher rates can curb its demand by increasing the appeal of yield-bearing assets.

The Bank of Japan raised interest rates to a 31-year high and signalled its readiness to keep pushing up borrowing costs. The Bank of England kept interest rates on hold on Thursday but warned they might have to go up.

"This high-rates environment, in my view, caps near-term gold upside... However, if rising yields stem from deteriorating fiscal confidence, war-related spending and wider deficits, as opposed to rate expectations, a weaker dollar could accompany higher yields, possibly turning the relationship supportive for gold," Assiri said. US/

Gold inched higher on Friday as lower oil prices and a subdued US dollar offered support, while market participants kept their focus on developments in the Middle East and the outlook for global monetary policy.

Spot gold XAU= was up 0.3% at $4,355.05 per ounce by 0423 GMT. US gold futures GCcv1 were down 0.1% at $4,394.10.

Oil prices fell for a third straight day, while the dollar remained subdued after retreating from recent highs. A weaker dollar makes greenback-priced commodities less expensive for holders of other currencies. O/R USD/