Gold prices decreased on Friday, but were set for their biggest weekly gain in more than eight months, as U.S. data pointing to slowing inflation boosted hopes that the Federal Reserve would slow its aggressive rate hikes.
As of early Friday morning, spot gold was down 0.2% at $1,752.17 U.S. per ounce. Prices have risen 4.2% so far in the week.
U.S. gold futures were little changed at $1,754.30.
The dollar index steadied after Thursday’s fall but was headed for its biggest weekly drop since March 2020. A weaker dollar makes gold more appealing to overseas buyers.
U.S. consumer prices rose less than expected in October, indicating that inflation was slowing, which raised hopes that the Fed will begin scaling back its hefty rate hikes.
Market participants are now seeing a 71.5% chance of a 50-basis-point rate hike at the Fed’s December meeting.
Gold is considered a hedge against inflation, but rising interest rates increase the opportunity cost of holding non-yielding bullion.
