Gold prices were flat on Friday as the dollar held close to its recent peak while the likelihood of more aggressive interest rate hikes by the U.S. Federal Reserve also weighed on the appeal for non-yielding bullion. FUNDAMENTALS Spot gold was flat at $1,671.60 per ounce by 0107 GMT. U.S. gold futures ticked 0.1% higher to $1,682.80.

The dollar index was down 0.1%, but not far from a 20-year peak scaled on Thursday in the wake of a 75-basis-point rate hike by the U.S. central bank and its hawkish outlook. Rising rates dull bullion’s appeal since it yields no interest. Gold prices have fallen nearly 20% since scaling above the key $2,000 per ounce mark in March.

Many central banks raised their interest rates this week, following the U.S. Federal Reserve in the fight against inflation, which has been sending shockwaves through financial markets and the economy. Euro zone inflation is set to go higher and price growth likely to be more persistent than earlier thought, European Central Bank board member Isabel Schnabel said on Thursday, defending the ECB’s plans to raise rates further.

The number of Americans filing new claims for unemployment benefits increased moderately last week, indicating the labour market remains tight despite the Fed’s attempt to cool demand with aggressive rate hikes. Holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, fell 0.21% to 950.13 tonnes on Thursday from 952.16 tonnes on Wednesday.

Spot silver was flat at $19.64 per ounce, platinum rose 0.3% to $903.22, while palladium dipped 0.2% to $2,165.10. DATA/EVENTS (GMT) 0715 France S&P Global PMI Flash Sept 0730 Germany S&P Global PMI Flash Sept 0800 EU S&P Global PMI Flash Sept 0830 UK Flash PMI Sept 1345 US S&P Global PMI Flash Sept 1800 Federal Reserve Chair Jerome Powell gives opening remarks at the “Fed Listens: Transitioning to the Post pandemic Economy” event in Washington