By Bharat Gautam

(Reuters] – On Friday, gold prices remained near a three month low as the strong dollar continued to erode demand for greenbacks-priced bullion. It could also have led to the metal’s fourth weekly decline.

Price action was choppy, with the ounce remaining flat at $1823.25 an ounce as of 0244 GMT. It hovered close to its lowest level since February 7th, when it hit earlier in session.

U.S. declined 0.1% to $1.823.00

Jeffrey Halley, OANDA Senior Analyst, stated that gold is vulnerable due to the fall in support from gold at $1835.00 and sell-off overnight in precious metals. “Gold will be exposed to further losses and could test support at $1780.00 an ounce.”

As concerns linger that U.S. Federal Reserve’s efforts to control inflationary pressures will crimp global growth, the dollar’s steady rise was near its 20th-year peak on Thursday. The currency’s safety-haven appeal continues to grow.

Bullion lost 3.1% in its first two-months, the most it has seen since February.

This week the U.S. central banking raised its benchmark overnight rate by half-a percentage point.

Bullion’s vulnerability to U.S. rising short-term rates and yields is what makes it more expensive to hold.

Stephen Innes, managing Partner at SPI Asset Management, stated, “Nominal yields also will rise. This will create double-yield troubles for gold investors. The Fed will remainhawkish till inflation indicators fall.”

The recent decline in gold almost erases gains made from rallies fueled by safe-haven interest after Russia invaded Ukraine in February. Mid-March saw gold prices rise to new highs thanks to the conflict.

Spot gold rose 0.6% to $20.79 per an ounce. Platinum was up 0.9% to $952.02 while palladium rose 1.9% (1,944.77). All were still on track for weekly losses.