Gold on Track for First Weekly Dip in Six; Focus on US Inflation Data

FILED - 16 March 2023, Bavaria, Munich: Gold bars and gold coins of different sizes lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa

Gold inched up on Friday ahead of a key US inflation report, but prices were on track for their first weekly drop in six weeks on easing concerns of a major escalation of the Middle East crisis.
Spot gold rose 0.3% at $2,339.32 per ounce by 0640 GMT. US gold futures rose 0.4% at $2,351.20, Reuters said.
However, for the week, prices were down 2.3%, set for their biggest weekly drop since early December, after a major escalation in the Middle East crisis was avoided. Prices were down nearly $100 from an all-time high of $2,431.29 scaled on April 12.
"Gold suffered a one-off decline on Monday this week and has idled since. Since then, prices have gone broadly nowhere, despite potential cross-currents from yields and the US dollar that might have been more influential in the past," Ilya Spivak, head of global macro at Tastylive, said.
"It seems like China's reserve accumulation is still the main influence on the market insulating it from broader macro forces."
Data showed that US economic growth slowed more than predicted in the first quarter, but an increase in inflation underlined recent remarks from Federal Reserve members implying the central bank was in no urgency to cut interest rates.
Higher rates reduce the appeal of holding non-yielding gold.
The focus now turns to March's core Personal Consumption Expenditures (PCE) index data due later on Friday - the Fed's preferred measure of inflation - for further clues on the US rate outlook.
A significant acceleration in the PCE numbers could further breed expectations that we may only see one rate cut from the Fed this year, said IG market strategist Yeap Jun Rong.
Spot silver rose 0.7% to $27.61 per ounce, spot platinum rose 1.2% to $925.40 and palladium gained 1.5% to $988.63. All three metals were headed for weekly declines.