PRECIOUS-Gold firms but heads for second consecutive weekly fall

By Ashitha Shivaprasad

March 13 (Reuters) - Gold prices firmed on Friday but were on track for a second consecutive weekly decline, with inflation worries driven by the Iran war weighing on rate‑cut expectations.

Spot gold XAU= gained 0.8% at $5,118.39 per ounce, by 8:52 a.m. ET (1252 GMT), but was down 1% for the week so far.

U.S. gold futures GCcv1 for April delivery steadied at $5,124.70.

The U.S. dollar was on course for a weekly rise, making greenback priced-bullion less affordable for other currency holders. USD/

"As expected, there was little reaction in gold to the Fed's 'favored' inflation indicator, it was high but on consensus, the release had been delayed as it was January data, but mostly importantly the Iran conflict and oil prices are dominating every market," said Tai Wong, an independent metals trader.

"The market remains overwhelmingly bullish on gold in the long term on fundamental drivers and its relative stability at this time is not a concern."

While gold is prized as a traditional hedge against inflation and periods of uncertainty, elevated rates typically curb its appeal by increasing the cost of holding bullion.

Data showed U.S. consumer spending increased slightly more than expected in January, which together with continued strength in underlying inflation and the war in the Middle East bolstered economists' views the Federal Reserve would not resume cutting interest rates for some time.

President Donald Trump said the U.S. was going to be hitting Iran "very hard over the next week", shortly after issuing a partial 30-day waiver for purchases of sanctioned Russian oil.

Oil prices dipped but were on track for weekly gains as Gulf disruptions due to the conflict broadly persisted. O/R

Elsewhere, resumption of some flights from Dubai has allowed gold flows from this major global trading hub to partially resume this week, three sources told Reuters.

Among other metals, spot silver XAG= rose 0.7% to $84.32.

Platinum XPT= lost 1.4% to $2,102.12 and palladium XPD= shed 0.6% to $1,608.75. The sister metals are on track to post weekly losses.