Gold prices were on track to end a volatile week higher on Friday as bank contagion fears bolstered both safe-haven demand and bets on a pause in Federal Reserve rate hikes, adding to the appeal of zero-yield bullion.
Spot gold was 0.1% higher at $1,996.05 per ounce by 10:49 a.m. ET (1449 GMT), holding within a relatively narrow $20 range. U.S. gold futures were also little changed at $1,995.90.
But the metal looked set to post a fourth consecutive weekly rise, of around 0.3%, having climbed to its highest level in a year above $2000 on Monday.
Banking shares were trounced again on Friday, with European giants Deutsche Bank and UBS knocked by worries that regulators and central banks have yet to contain the worst shock to the sector since the 2008 financial crisis.
"Any concern that pops up about U.S. banks being undercapitalized is going to be a factor for gold to rise," said Bob Haberkorn, senior market strategist at RJO Futures.
"The dips that you see will be bought up fairly quickly in this environment."
Gold investors also took stock of comments from St. Louis Federal Reserve president James Bullard and Atlanta President Raphael Bostic who both acknowledged that while banking sector woes made the central bank's interest rate call challenging, the focus was still on bringing down inflation.
The Fed this week raised rates by an expected quarter of a percentage point but signaled it was on the verge of pausing.
Commerzbank expects gold to climb to $2,000 per troy ounce by the end of the year citing Fed projections raising the prospect of rate cuts for 2024.
Silver jumped 1.1% to $23.37 and was on course for a second weekly gain. Platinum fell 1.4% to $970.24 while palladium sank 1.8% to $1,404.99, with both set to end the week lower.
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