Gold fell on Friday after hitting a seven-week high in the previous session as the dollar edged up and a technical correction set in, but the yellow metal was still on track to end higher for a third straight week.

Spot gold fell 0.4 per cent to $1,191.39 per ounce by 0256 GMT. Bullion had on Thursday touched a high of $1,206.98, its best since November 23.

US gold futures fell 0.7 per cent to $1,191.50 per ounce.

“Currently we see that gold is over-bought and needs some technical correction,” said Jiang Shu, chief analyst at Shandong Gold Group.

The medium term for gold prices is fairly positive, he said, until expectations for a US interest rate hike in March kickin. “For a short term, prices may fall towards $1,170, and then climb up above $1,210 and with the approach of the Federal Reserve’s March conference, prices may go down again.”

Spot gold faces a strong resistance zone of $1,205-$1,210 per ounce, and may retrace steps back towards support at $1,172, according to Reuters technical analyst Wang Tao.

The dollar index, which measures the greenback against a basket of currencies, rose 0.2 per cent to 101.580.

Federal Reserve Chair Janet Yellen did not comment on the outlook for the US economy or monetary policy in remarks to teachers, saying improving U. education could help raise living standards.

Several Fed officials had on Thursday cautioned that the fiscal and tax plans sketched out by the incoming Trump administration could spur a short-term economic boost that would result in longer-run inflation and debt problems.

In an array of appearances, Fed regional bank presidents agreed in principle that the policies likely to be pursued by President-elect Donald Trump will raise economic growth - through direct spending, the consumption and investment spurred by tax cuts, and the boost to business from lighter regulation.

Trump’s campaign calls for tax cuts and more infrastructure spending have boosted US shares and the dollar, as well as driving a sell-off in Treasuries, but his protectionist statements and a flurry of off-the-cuff posts on Twitter have kept many investors from adding to risky positions.

The number of Americans filing for unemployment benefits rose less than expected last week, pointing to a tightening labour market that is starting to spur faster wage growth.

Among other precious metals, spot silver fell 0.4 per cent at $16.70, after hitting a near one month high of $16.92 in the previous session.

Platinum fell 0.6 per cent to $966.50. It had touched a 2-month high of $990.10 in the prior session. Palladium fell 0.8 per cent to $750.50.

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