PRECIOUS-Gold heads for weekly loss amid oil-driven inflation concerns

May 1 (Reuters) - Gold held steady on Friday, but was on course for a weekly decline as higher oil prices fuelled inflation worries and clouded the interest rate outlook.

FUNDAMENTALS

Spot gold XAU= was unchanged at $4,622.41 per ounce, as of 0046 GMT, after rising more than 2% in the previous session. The metal was on track for a weekly loss of 1.8%.

U.S. gold futures GCcv1 for June delivery rose 0.1% to $4,635.10.

Iran said on Thursday it would respond with "long and painful strikes" on U.S. positions if Washington renewed attacks and restated its claim to the Strait of Hormuz, complicating U.S. plans for a coalition to reopen the waterway.

Brent oil rose to a four-year peak of over $126 a barrel on Thursday before pulling back. O/R

The European Central Bank and the Bank of England kept interest rates unchanged on Thursday, as expected, following holds earlier in the week by the Federal Reserve and the Bank of Japan.

Global brokerages have gradually stepped back from earlier expectations of two U.S. rate cuts in 2026, with forecasts now split between some easing and none due to lingering inflation risks and cautious policymakers.

Data showed the U.S. Personal Consumption Expenditures Price Index jumped 0.7% last month, the largest gain since June 2022. The increase was in line with economists' expectations.

India's April gold imports are set to fall to a near 30-year low of around 15 metric tons, industry and government sources said, because banks have been hit by an unexpected tax demand.

China's Central bank and customs authority said on Thursday they would streamline gold import-export permit rules, finalising a plan first proposed in September.

Spot silver XAG= rose 0.8% to $74.34 per ounce, platinum XPT= gained 0.1% to $1,987.55, and palladium XPD= was up 0.3% at $1,528.39.