*
Gold down about 0.8% so far this week
*
Palladium sees biggest weekly drop in two months
*
Commerzbank sees gold rising to $1,850 by end of 2023
Dec 16 (Reuters) -
Gold prices firmed on Friday but were on course for their biggest weekly fall since mid-November as several central banks this week signalled that more rate hikes are needed to curb inflationary pressures.
Spot gold rose 0.3% to $1,782.61 per ounce, as of 1217 GMT. It is down about 0.8% for the week so far, having hit a one-week low in the previous session.
U.S. gold futures were up 0.3% at $1,792.70.
Gold prices have reacted to the big spike in bond yields in Europe as a result of the hawkish messaging from the European Central Bank, said Michael Hewson, chief markets analyst at CMC Markets.
The ECB on Thursday raised its key interest rates by half a percentage point and indicated that more hikes were likely, a move similar to ones by the U.S. Federal Reserve and the Bank of England.
The Fed had on Wednesday raised interest rates by 50 basis points as expected, but Fed Chair Jerome Powell said the U.S. central bank will deliver more interest rate hikes next year, despite growing recession worries.
Although gold is considered a hedge against rising inflation, higher rates raise the opportunity cost of holding non-yielding bullion.
Commerzbank sees gold falling back towards $1,750 per ounce until it is clear that the Fed's cycle of interest rate hikes is over, and expects prices to rise to $1,850 by the end of 2023.
Meanwhile, India raised the base import prices of gold and silver late on Thursday. The country is the world's biggest importer of silver and the second-biggest consumer of gold.
Spot silver fell 0.9% to $22.85 per ounce, and was down about 2.6% so far for the week.
Platinum lost 0.8% to $998.63. Palladium was 0.3% lower at $1,785.87 after falling more than 8% in the previous session, and was headed for its biggest weekly drop in two months. (Reporting by Kavya Guduru in Bengaluru; Editing by Maju Samuel)
