Gold prices edged higher on Friday En route to their biggest weekly gain in more than two years as U.S. data pointing to slowing inflation boosted hopes that the Federal Reserve would slow its aggressive rate hikes.
Spot gold was up 0.4% at $1,761.73 per ounce, as of 0610 GMT. Prices have risen 4.7% so far in the week, heading for their biggest gain since July 2020.
U.S. gold futures rose 0.6% to $1,764.50.
The dollar index inched 0.3% lower and 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.
If the euphoria in the market continues, gold prices could rise much higher and hit the $1,762-$1,767 range in the near term, Wong said.
Market participants now see 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 rates increase the opportunity cost of holding non-yielding bullion.