Gold prices were flat on Friday but headed for a second week of gains, as some weak U.S. economic data fanned expectations that the Federal Reserve might ease the aggressive pace of raising interest rates beginning December.

FUNDAMENTALS

* Spot gold was flat at $1,663.22 per ounce, as of 0130 GMT but it was up 0.4% for the week so far.

* U.S. gold futures were unchanged at $1,666.00.

* The dollar index held steady after rising 0.7% overnight, although the benchmark 10-year Treasury yields were below the 4% threshold.

* The U.S. economy rebounded strongly in the third quarter amid a shrinking trade deficit, but the data overstated the nation’s economic health as domestic demand was the weakest in two years.

* The Fed is widely expected to announce another 75 basis-point rate increase at its meeting next week, although the central bank is seen slowing its aggressive pace in December.

* U.S. rate hikes increase the opportunity cost of holding zero-yielding bullion, while boosting the dollar, in which it is priced.

* The European Central Bank raised interest rates by 75 basis points on Thursday and put the reduction of its bloated balance sheet on the agenda, but said “substantial” progress had already been made in its bid to fight off a historic surge in inflation.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.34% to 925.20 tonnes on Thursday.

* Spot silver eased 0.2% to $19.54 per ounce, platinum rose 0.2% to $962.03 and palladium gained 0.5% to $1,951.07.