Gold down 0.8, dollar up about 1 for the week
Markets see 55 chance of March rate cut vs 71 last week
Geopolitical tensions also aid uptick in gold analyst

Jan 19 Reuters Gold drifted higher on Friday, buoyed by a weaker U.S. dollar but was set to log its biggest weekly decline in six after the Federal Reserve countered market expectations of an early interest rate cut.

Spot gold rose 0.5 to 2,032.90 per ounce by 1231 GMT but was down 0.8 so far in the week. U.S. gold futures rose 0.7 to 2,035.80.

The longerterm price outlook is positive for gold, said independent analyst Ross Norman, adding that gains are deferred as markets try to get a handle on the likely U.S. rate cuts and the likely trajectory of the dollar and gold.

The dollar index dipped 0.1 but was up nearly 1 for the week. A stronger dollar makes greenbackdenominated gold more expensive for foreign currency holders.

Atlanta Federal Reserve President Raphael Bostic on Thursday said he was open to lower rates sooner than anticipated depending on how quickly inflation falls, but the baseline was for cuts to start in the third quarter.

Traders now expect about a 55 chance of a rate cut in March, down from 71 last week, according to CME39;s Fed Watch Tool.

Lower interest rates decrease the opportunity cost of holding bullion.

Modest gains in gold also came amid simmering, which boosted flows into safehaven assets, Frank Watson, market analyst at Kinesis Money, said in a note.

Spot silver gained 0.3…