Gold on track for biggest decline in 9 weeks

Gold bullion bars and coins.
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Gold bullion bars and coins.

Gold crawled higher early on Friday but stayed near seven-week lows and remained on track for its biggest weekly decline in nine, with positive economic data boosting expectations U.S. interest rates will rise in the next two months.

Spot gold had climbed 0.2 percent to $1,222.46 per ounce by 0046 GMT. The metal has fallen about 2.4 percent so far this week, heading towards its biggest weekly decline since March 25.

U.S. gold was up 0.2 percent at $1,222.50.

The U.S. Federal Reserve continued to lay the groundwork for an interest rate hike in the next two months, with Governor Jerome Powell saying he felt the U.S. economy was on a "solid footing" and within reach of the central bank's inflation goals.

The U.S. economy is set to grow by a 2.9 percent annualized rate in the second quarter following the latest data on durable goods orders and advance goods trade, the Atlanta Federal Reserve's GDPNow forecast model showed on Thursday.

U.S. business spending intentions weakened in April for a third straight month amid soft demand for machinery, but a surge in contracts to purchase previously owned homes to a 10-year high supported views economic growth was gaining speed.

Japan's core consumer prices fell 0.3 percent in April from a year earlier, the second straight month of declines, keeping the central bank under pressure to deploy additional stimulus to achieve its ambitious 2 percent inflation target.

Gold market participants will be covered from next year by a new code of best practice brought in to replace the bullion market annex of the Non-Investment Products (NIPs) code, the London Bullion Market Association said on Thursday.

Top consumer China's net gold imports via main conduit Hong Kong fell 4.2 percent in April from a three-month high in the previous month, data showed on Thursday.

The dollar stayed in consolidation mode early on Friday after its rally to two-month highs ran out of steam with bulls looking for fresh guidance from the head of the U.S. central bank.