* Gold may break support at $1,769/oz – technicals
* Palladium, platinum heads for best week since March
* Gold up more than 0.8% so far this week (Recasts, adds comments, updates prices)
June 25 (Reuters) – Gold gained on Friday and was set to post its first weekly rise in four as the dollar weakened, with investors awaiting U.S. inflation data after mixed signals from Federal Reserve officials on interest rate hikes.
Spot gold was up 0.2% at $1,778.48 per ounce by 0327 GMT. It has risen more than 0.8% so far this week, after last week’s 6% drop.
U.S. gold futures rose 0.1% to $1,778.30.
“Gold has really struggled to rebound convincingly this week. The market is struggling for a conviction or direction in the U.S. dollar,” said Stephen Innes, managing partner at SPI Asset Management.
“The gold market continues to consolidate around these levels until the data comes out. The Feds are in no rush to raise rates and there would be enough inflation in the market to support gold.”
The dollar index slipped 0.1% against its rivals, making gold less expensive for holders in other currencies, ahead of U.S. producer price data due later in the day that would offer further clues on rising inflation.
Two Fed officials warned on Thursday that inflation could rise more than policymakers’ expectation in the near term.
Fed chief Jerome Powell, however, said this week inflation would not be the only determinant of interest rate decisions, calming investors worried about policy tightening after the Fed’s hawkish turn.
Gold is viewed as a hedge against higher inflation that could follow stimulus measures.
Spot gold may break a support at $1,769 per ounce and fall into a range of $1,734-$1,744, according to Reuters technical analyst Wang Tao.
Palladium rose 0.5% to $2,653.17 per ounce, while platinum climbed 0.6% to $1,099.11. Both the metals were on track for their best week since March.
Silver was up 0.5% at $26.06 per ounce. (Reporting by Brijesh Patel in Bengaluru; Editing by Aditya Soni)
