With support from Middle East tensions and speculation that U.S. interest rates may have peaked as markets review the most recent inflation data, gold nudged up on Friday and was on track for its best week in seven months.
At 0343 GMT, the spot price of gold was up 0.3% at $1,873.25 per ounce. A 0.2% increase brought U.S. gold futures to $1,885.80.
After strengthening in the previous day following information indicating an increase in U.S. consumer prices in September, U.S. Treasury rates and the currency changed direction in the early hours of Friday.
Only somewhat higher than the headline number was ours. Ilya Spivak, head of global macro at Tastylive, stated that “the core number was lower as anticipated… and it doesn’t seem like this really changes the Fed’s calculus at all.”
“At this time, we are still unsure of what higher for longer entails. The expectation is that the cycle of rate increases is now complete, and the signals the Fed is sending to us seem to support that belief.
Prior to the release of the inflation statistics, gold had risen to its highest level in two weeks on Thursday, helped by key policymakers’ dovish stances, who remarked that the recent increase in U.S. Treasury yields may make additional rate hikes less likely.
The non-yielding asset was on course for a more than 2% increase this week, the biggest since mid-March, thanks to that as well as safe-haven demand amid violent hostilities between Israel and the Palestinian Islamist group Hamas.
Investors also evaluated the most recent inflation statistics from China, the largest purchaser of gold, which revealed that consumer prices weakened and factory-gate costs decreased slightly more quickly than anticipated in September, both factors indicating continued deflationary pressures.
In what appeared to be its first weekly rise in three, spot silver increased 0.5% to $21.94 per ounce.
Palladium was unchanged at $1,144.28 and platinum was down 0.1% at $867.28; both metals were headed for weekly drops.