2017.10.2000:01:00UTC+00Gold Holds Onto Gains as Dollar Slips

Gold prices held firm early on Friday as the dollar dropped following a report that U.S. President Donald Trump was leaning towards a less hawkish candidate as the next chair of the Federal Reserve.

Spot gold was stable at $1,289.52 per ounce. The precious metal rose 0.7 percent in the session earlier.

U.S. gold futures for December delivery climbed 0.1 percent to $1,291.30 an ounce.

The dollar index, which measures the U.S. currency against a basket of peers, fell 0.1 percent to 93.193.

U.S. President Donald Trump has concluded interviews with the five candidates he is considering to chair the Federal Reserve and could announce a decision as early as next week, according to a source familiar with the matter.

Federal Reserve Governor Jerome Powell is the leading candidate to become the next chair of the U.S. central bank after President Donald Trump concluded meetings with the finalists on Thursday, Politico reported, citing three administration officials.

Powell is considered less hawkish than other candidates on Trump's short list. Powell would be expected to favour lower interest rates for the United States, reducing the value of the dollar to investors.

Demand for the yellow metal soared in India this week due to Dhanteras and Diwali. However, high prices weighed on gold's appeal during the key festival period this year.