Gold futures all but erased earlier gains Friday after data showed core U.S. consumer inflation rose more strongly than expected, leaving the metal on track for a weekly loss as traders look for a rate hike by the Federal Reserve later this year.
Gold for June delivery on Comex was up $1.60, or 0.1%, at $1,205.70 U.S. an ounce, while July silver was up 0.3 cent at $17.135 U.S. an ounce. Gold traded as high as $1,214.60 U.S. in earlier action.
The metal is heading for a weekly fall of around 1.6% after two consecutive weekly gains; silver was on track for a 2.5% weekly fall.
U.S. consumer prices rose 0.1% in April, while core prices, which excludes food and energy, rose 0.3%. Economists had forecast a 0.1% rise by both measures.
Economists said the data leaves the Federal Reserve on track to hike interest rates later this year. Although expectations for a hike as early as June were all but eliminated earlier this week in the wake of the minutes from the Fed’s April meeting, the prospect of a move continues to cast a negative cloud over gold, analysts said.
That is in part due to the dollar, which strengthened versus the yen and the euro in the wake of the data. Remarks by Federal Reserve Chairwoman Janet Yellen, scheduled for 1 p.m. Eastern, could create volatility ahead of the close.
In other metals trade, July platinum fell $2.40, or 0.2%, to $1,149.90 U.S. an ounce, while June palladium declined $5.65, or 0.7%, to $770.45 U.S. an ounce.
July copper lost five cents, or 1.8%, to $2.7985 U.S. a pound.
