Gold edged down on Friday and was set for a weekly fall, with investors awaiting key monthly U.S. inflation data for cues on the future of the Federal Reserve’s monetary policy.
Spot gold prices fell 0.2% to $1,843.59 U.S. per ounce, while U.S. gold futures pulled back by 0.4% to $1,845.90.
U.S. consumer price index data expected later in the day has market participants anxiously waiting for confirmation that decades-high inflation peaked in March.
Gold prices have fallen about 0.3% this week.
A robust CPI reading could signal a more aggressive Fed and see bullion prices test $1,825 and push gold to as low as $1,800, but a benign print could have the opposite effect.
The Fed will hike its key interest rate by 50 basis points in June and July, with rising chances of a similar move in September, according to a Reuters poll of economists who see no pause in rate rises until next year.
Bullion is often seen as an inflation hedge, but the opportunity cost of holding it is higher when the Fed raises short-term interest rates to combat inflation.
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