(Adds comments and technicals, updates prices)
* Gold may retest support at $1,744/oz - technicals
* Dollar holds close to near-three week peak
Sept 17 (Reuters) - Gold prices rebounded on Friday after
sliding to an over one-month low in the previous session, though
a firm dollar set the metal on course for a weekly decline as
investors awaited next week's U.S. Federal Reserve policy
Spot gold rose 0.5% to $1,762.55 per ounce by 0716
GMT, while U.S. gold futures gained 0.4% to $1,762.80.
The precious metal has declined 1.6% this week.
"While support at $1,750 has so far held with some
speculative short-covering lifting prices, the bounce looks
anaemic and gold faces another test of $,1750 as the dollar
remains firm," said Jeffrey Halley, a senior market analyst for
Asia Pacific at OANDA.
The dollar held close to a near three-week peak on Friday,
increasing gold's cost for buyers holding other currencies.
On the technical front, gold may end its bounce in a
resistance zone of $1,763-$1,768 per ounce, and retest a support
at $1,744, according to Reuters technical analyst Wang Tao.
Bullion slipped as much as 2.7% on Thursday, as the dollar
index jumped after an unexpected increase in U.S. retail sales
last month raised expectations of the Federal Reserve
potentially reducing its stimulus sooner.
The Federal Open Market Committee's two-day policy meeting
is due to be held on Sept. 21-22.
Reduced central bank stimulus tends to lift bond yields,
which raises the opportunity cost of holding non-interest
bearing gold. It also helps boost the dollar, further weighing
Michael Langford, director at corporate advisory AirGuide,
also said "the unpublished European Central Bank inflation
estimate has driven short term sentiment against gold at the
prospect of rate rises potentially happening earlier than
Silver was flat at $22.94 per ounce, after hitting
its lowest in more than a month on Thursday.
Platinum rose 1.1% to $942.76, while palladium
dipped 1.3% to $2,007.95.
(Reporting by Nakul Iyer in Bengaluru; Editing by Sherry
Jacob-Phillips and Rashmi Aich)