Gold steadied after posting the biggest weekly loss in 15 months as the Federal Reserve’s hawkish shift damped reflation bets.

Inflation risks may warrant the US central bank beginning raising interest rates next year, St. Louis Fed President James Bullard said Friday. His comments came after last week’s Fed meeting where officials signalled monetary policy tightening could start earlier than expected, with Chair Jerome Powell saying that the Fed would begin a discussion about scaling back bond purchases used to support financial markets and the economy during the pandemic.

Bullion has been weighed down by concerns over tighter monetary policy, although Powell cautioned that discussions about raising interest rates would be “highly premature.” He’s due to testify at a House Subcommittee hearing on the Fed’s pandemic emergency lending and its asset purchase programs Tuesday.

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