Gold extends losses on stronger dollar, possible Fed rate hike

Gold extended losses on Friday, weighed down by a stronger US dollar and expectations the US Federal Reserve will hike rates next week.

Spot gold was down 0.3 percent at USD1,167.40 an ounce by 0054 GMT, on track for a fifth consecutive weekly decline.

US gold futures shed 0.2 percent to USD1,169.60 per ounce. The dollar held large gains against the yen and euro early on Friday.

US Treasury yields rose on Thursday in line with their European counterparts after the European Central Bank prolonged its bond purchase programme, as expected, but stunned traders by scaling back on the amount of bonds it will buy each month.

The European Central Bank trimmed back its asset buys in a surprise move on Thursday but promised protracted stimulus to aid a still fragile recovery, and dismissed any talk of tapering the programme away.

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