By Anushree Mukherjee and Ashitha Shivaprasad
(Reuters) – Gold prices eased on Friday but were still headed for a third consecutive week of gains, as U.S. inflation data and dovish comments from a Federal Reserve official revived hopes the central bank might cut interest rates more than once this year.
Spot gold fell 0.3% to $2,706.71 per ounce as of 0941 GMT. Bullion has gained about 0.6% so far this week.
U.S. gold futures dropped 0.7% to $2,732.00.
“Gold gained support this week, buoyed by weaker-than-expected U.S. economic data, including PPI and CPI figures, alongside dovish remarks from Federal Reserve policymakers,” said Zain Vawda, market analyst at MarketPulse by OANDA.
“Persistent uncertainties surrounding 2025 further bolstered the metal’s appeal.”
U.S. data released on Wednesday showed softer-than-expected core inflation, raising bets on a Fed rate cut, with rate futures traders pricing in nearly even odds of two cuts by year-end. Echoing this sentiment, Fed Governor Christopher Waller said three or four cuts could be possible if U.S. economic data weakens further.
Gold is considered an inflation hedge, while lower rates boost the non-yielding asset’s allure.
As President-elect Donald Trump’s Jan. 20 inauguration approaches, attention is also centred on his policies, which could stimulate inflation. He has pledged to impose trade tariffs.
“While upside risk to inflation increases the prospects of shallower rate cuts, this also means lower or steady real rates which will be supportive for gold investment,” ANZ said in a note.
“We expect exchange-traded funds flows to turn positive after three years of consecutive outflows.” [GOL/ETF]
Elsewhere, gold discounts in India increased to their widest in six months as a rise in domestic prices dampened demand and jewellers awaited the annual federal budget.[GOL/AS]
Spot silver was down 0.9% to $30.49 per ounce. Palladium eased 0.5% to $936.31.
Platinum added 0.6% to $937.50 but set to register its worst week since November.
(Reporting by Anushree Mukherjee and Ashitha Shivaprasad in Bengaluru; Editing by rigank Dhaniwala and Emelia Sithole-Matarise)
