PRECIOUS-Gold set for second weekly gain as dollar weakens

(Updates prices)

* Gold up 1.4% so far this week

* Gold could test $1,800/oz level again- analyst

* Gold trade lacklustre despite robust U.S. inflation data - Citi

Oct 22 (Reuters) - Gold prices gained for a fourth consecutive session on Friday, and were on track for a second straight weekly gain as a weaker U.S. dollar and growing inflationary pressure boosted demand for the safe-haven metal.

Spot gold rose 0.6% to $1,793.59 per ounce by 1130 GMT, and was up 1.4% for the week.

U.S. gold futures gained 0.7% to $1,795.00.

The dollar index headed for a second week of declines, lending support to gold by making it more attractive for buyers holding other currencies.

“There has been a pick up in inflation expectations and that has supported gold, along with a softer dollar,” Saxo Bank analyst Ole Hansen said, adding that the metal was making another attempt to challenge the $1,800 mark.

Further, Hansen said, while growth concerns could reduce the ability for central banks to be aggressive on hiking rates and in turn help gold, the sharp recovery in stock markets remains a hindrance.

Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes push government bond yields up, denting the bullion’s appeal.

Meanwhile, euro zone inflation expectations hit their highest levels in years on Friday, putting additional pressure on the European Central Bank and its insistence on maintaining crisis-era stimulus.

Elsewhere, Atlanta U.S Federal Reserve President Raphael Bostic said he expects high inflation to persist into 2022 and the central bank should raise interest rates by the end of next year.

However, Citigroup, in a note, said, “spot bullion trading remains lacklustre despite robust U.S. inflation data and increased investor concerns about stagflation risk... price action appears to struggle near or above $1,800/oz.”

“Several forces might be driving what seems to be weaker bullish sentiment for gold - certainly versus 2019 and 2020.”

Spot silver gained 0.9% to $24.34 per ounce and was on track for a fifth consecutive weekly gain.

Platinum rose 1% to $1,059.21, while palladium fell 0.4% to $2,009.10. (Reporting by Arundhati Sarkar in Bengaluru; Editing by Krishna Chandra Eluri, Kirsten Donovan)