By Bharat Gautam

(Reuters) - Gold prices hovered near a three-month low on Friday and were set for their fourth straight weekly fall, as the strongest dollar in two decades dampened demand for greenback-priced bullion.

Spot gold was up 0.1% at $1,823.40 per ounce, as of 0804 GMT, in choppy trade. Earlier in the session, it hit its lowest since Feb. 7. U.S. gold futures were flat at $1,824.60.

"The fall through support by gold at $1,835.00, and the sell-off in other precious metals overnight, leave gold vulnerable to deeper losses and a potential test of support at $1,780.00 an ounce," OANDA senior analyst Jeffrey Halley said.

The dollar steadied near a fresh 20-year high scaled on Thursday as concerns persisted that the U.S. Federal Reserve's actions to tame inflationary pressures would crimp global economic growth, boosting the currency's safe-haven appeal. [USD/]

Bullion has lost about 3% so far this week, its most in two months.

Last week, the U.S. central bank increased its benchmark overnight interest rate by an aggressive half-a-percentage point.

Bullion is sensitive to rising U.S. short-term interest rates and bond yields, which raise the opportunity cost of holding it. [US/]

"Nominal yields will also climb, creating double yield trouble for gold investors as the Fed will remain hawkish until inflation indicators fall," said Stephen Innes, managing partner at SPI Asset Management.

Gold's recent slide has wiped out most gains made in a rally driven by safe-haven demand in anticipation of and after Russia's invasion of Ukraine in February. The conflict powered gold prices all the way to near-record levels in mid-March.

Spot silver was up 1% at $20.86 per ounce, but has fallen about 6.6% this week, the most since late January.

Platinum gained 1.7% to $959.45 and palladium rose 2.8% to $1,961.03 though both were on track for weekly losses.