(Reuters) – Gold prices moved higher on Friday and headed for a fifth consecutive weekly gain, with market attention focused on further cues after the U.S. Federal Reserve delivered its first rate cut of the year.

Spot gold was up 0.7% at $3,669.19 per ounce by 12:18 am EDT (1618 GMT). Prices are up 0.7% so far this week. U.S. gold futures for December delivery gained 0.7% to $3,702.30.

The U.S. central bank cut its key interest rate by 25 basis points on Wednesday but tempered the move with warnings about persistent inflation, casting doubt over the pace of future easing.

Following the decision, spot gold prices hit a record high of $3,707.40 before retreating in volatile trading.

“Gold remains pretty strong here and is just seeing a pause after the Fed. The bullish trend remains intact with new highs inevitable and realistically we could see $4,000 before year-end,” said RJO Futures market strategist Bob Haberkorn.

Fed Bank of Minneapolis President Neel Kashkari said job market risks warranted this week’s rate cut and likely reductions at the central bank’s next two meetings.

Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold. The metal also tends to perform well during periods of uncertainty and has gained nearly 40% so far this year.

Physical gold premiums in India rose to a 10-month high this week as record prices near a festive season failed to deter investors from buying bullion in anticipation of further gains, while discounts in China widened to a five-year peak. (GOL/AS)

Elsewhere, spot silver rose 2.1% to $42.67 per ounce and platinum firmed 1.3% to $1,401.40. Palladium was down 0.6% at $1,143.07 and headed for a weekly loss.

“What I’m seeing is that many investors are now turning to platinum and silver as they are more affordable than gold,” said Haberkorn.

(Reporting by Ashitha Shivaprasad in Bengaluru. Editing by Jane Merriman and Krishna Chandra Eluri)