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Market attention will be squarely focused on Fed Chair Janet Yellen's comments to gauge the future path of interest rates.

Spot gold was up 0.2 per cent at United States dollars 1,228.96 an ounce at early trade, taking its gains this week to 2 per cent.

In worldwide trade, gold futures ended higher, helping the yellow metal record its highest weekly climb since early February, as weakness in the United States dollar, following Wednesday s Federal Reserve decision, provided a runway for gains.

"Whether folks agree or disagree with the need to hike, the key here is that the Fed has signaled to markets, and importantly U.S. and global businesses, that it is in control and the economy is moving as expected", said Greg McKenna, chief market strategist at AxiTrader, in a note.

But the dollar struggled to make more progress through the European morning and waned as NY traders arrived at their desks.

"Last Friday's employment report is likely to have convinced the FOMC to go ahead with the rate hike that they carefully signaled to the markets earlier this month".

Gold prices held steady on Wednesday ahead of the outcome of a two-day Federal Reserve meeting, with the US central bank widely expected to raise interest rates.

Rate rises lead to higher bond yields, which increase the opportunity cost of holding non-yielding bullion and tend to boost the dollar, in which gold is priced.

The euro strengthened against the USA currency after early returns showed the Netherlands' centre-right Prime Minister Mark Rutte had roundly seen off a challenge by anti-Islam, anti-EU Geert Wilders in an election on Wednesday, a huge relief to other EU governments facing a wave of nationalism.

Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.53 percent on Wednesday.

However, the G-20 meeting of finance ministers and central bankers this weekend could lend a potential safe-haven bid to gold, said Jeffrey Halley, senior market analyst at OANDA. On Thursday the metal hit $1,233.13 USA, its highest since March 6.

Japanese market futures were lower than the Nikkei 225's last close at 19,577.38: Futures in Chicago were down 0.52 per cent at 19,475 and Osaka futures fell 1.05 per cent to 19,370.

Platinum crept up 0.03% to $953.75 US, while palladium was up 1.8% at $777.70 U.S.


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