By Anushree Ashish Mukherjee
(Reuters) – Gold prices held steady on Friday but headed for a weekly gain as the dollar and Treasury yields weakened amid increased expectations that the U.S. Federal Reserve is done with its monetary policy tightening.
Spot gold was steady at $1,980.10 per ounce, as of 9:58 a.m. ET (1458 GMT) after rising to a two-week high earlier in the session. Prices were up about 2.3% so far this week.
U.S. gold futures fell 0.2% to $1,982.80.
“There is a strong potential for gold to continue to rally a bit more but prices have to move a bit lower, before the next leg up in the rally and perhaps test $2,000 level at the same time,” said Everett Millman, chief market analyst at Gainesville Coins.
“Data that came out this week cemented the fact that the Fed is likely done with rate hikes, helping gold. Gold’s move will depend on incoming data and market response to the data.”
This week’s data revealed that the U.S. Consumer Price Index was unchanged in October and another set of data highlighted that the number of Americans filing new claims for unemployment benefits increased more than expected last week.
The market is now pricing in rate cuts as early as May next year after data pointed to slowing inflation.
Lower interest rates exert downward pressure on the dollar and bond yields, enhancing the appeal of non-yielding bullion.
The dollar was on track for a weekly drop, while the 10-year Treasury yield also fell. [USD/] [US/]
On the physical front, Indian buyers brushed off record high local prices this week making gold purchases during the Diwali festival week in the country. [GOL/AS]
Spot silver fell 0.1% to $23.69 per ounce, but was up 6.9% for the week so far. Platinum was flat at $892.71 , but has gained 6.8% for the week.
Palladium fell 0.2% to $104.142 per ounce and was heading for its best week in over a year.
(Reporting by Anushree Mukherjee and Ashitha Shivaprasad in Bengaluru. Editing by Jane Merriman)
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