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Gold up 1% so far for the week

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Silver hit over three-year peak in the last session

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Platinum has gained over 7% so far this week

(Adds comment in paragraph 9, updates prices and graphic)

By Sherin Elizabeth Varghese

May 17 (Reuters) -

Gold prices appeared set for a second consecutive weekly

gain on Friday, after recent U.S. inflation data fuelled

expectations that the Federal Reserve could cut interest rates

twice this year, weighing on the dollar and Treasury yields.

Spot gold was up 0.4% at $2,384.86 per ounce, as of

0650 GMT. Bullion prices have gained 1% so far this week, having

hit one-month highs in the last session. U.S. gold futures

rose 0.2% at $2,389.20.

"The upward bias for gold prices may remain, with the recent

run in U.S. economic data offering room for the Fed to consider

earlier rate cuts in 2024 while geopolitical tensions rock on,"

said IG market strategist Yeap Jun Rong.

Data this week showing signs of cooling inflation offered

the Fed good news, but policymakers haven't openly shifted views

yet about the timing of rate cuts investors are convinced will

start this year.

Bullion is known as an inflation hedge, but higher rates

increase the opportunity cost of holding non-yielding gold.

"Gold prices may correct lower as markets look to

re-establish the historical relationship between gold and the

U.S. dollar. It goes without saying that uncertainty will likely

persist in gold markets in coming months," Commonwealth Bank of

Australia said in a note.

The dollar index was down 0.7% for the week so far,

making gold less expensive for other currency holders.

On a technical basis, the path of least resistance for now

seems to be pointed to the upside, said Ilya Spivak, head of

global macro at Tastylive, adding that if the all-time high at

around $2,431.29 is broken, an extension to $2,500 may follow.

Spot silver rose 0.2% to $29.68 per ounce after

hitting an over three-year high in the previous session, and

palladium dropped 0.6% to $987.84.

Platinum rose 0.8% to $1,065.83, after hitting

its highest levels since May 12, 2023 on Thursday. The metal has

gained over 7% so far for the week.