By Seher Dareen
(Reuters) – Gold prices edged up on Friday ahead of a long holiday weekend as U.S. inflation data showed some cooling, yet perhaps not significant enough for the Federal Reserve to slow down their rate-hike path.
Spot gold edged up 0.1% to $1,793.68 per ounce by 10:00 a.m. ET (1500 GMT), while U.S. gold futures rose 0.3% to $1,800.30.
U.S. consumer spending, which accounts for more than two-thirds of U.S. economic activity, edged up 0.1% in November after climbing 0.4% in October, while inflation cooled further.
With inflation close to being in line with expectations, gold prices were higher on fresh speculative buying ahead of the new year on bets that the bigger funds might move to the long side of gold at the beginning of the year, said Jim Wyckoff, senior analyst at Kitco Metals.
Bullion prices dipped over 1% on Thursday after U.S. GDP data highlighted the country’s economy rebounded faster than previously estimated, potentially setting the Fed on a keener path to fight inflation.
While gold is seen as an inflation hedge, rate hikes to tame soaring price pressure weigh on the non-yielding asset that pays no interest.
Gold prices are on track for a second consecutive yearly decline, falling nearly 2%, with prices down more than $250 since March highs as central banks hiked interest rates to tame inflation.
However, “you’re going to see a better demand picture for the metals in 2023. Inflation could still be problematic, but central banks are going to, around mid-year, start to let off the gas and that’s going to be supportive for the metals markets,” Wyckoff highlighted.
Markets also kept a close tab on rising COVID-19 infections in top gold consumer China that could have an impact on physical buying. [GOL/AS]
Spot silver rose 0.3% to $23.63 per ounce, while platinum jumped 3.7% to $1,013.47. Palladium rose 2.4% to $1,720.92, yet was headed for a second consecutive weekly fall.
(Reporting by Seher Dareen in Bengaluru; Editing by Shailesh Kuber)
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