New York, Feb. 10 (U.S.): Gold prices were nearly flat on Friday, while market focus shifted to next week’s US inflation data that is likely to provide clarity on the Fed’s monetary policy path.
Spot gold XAU= was little changed at $1,862.74 an ounce, as of 1209 GMT, after hitting its lowest level since Jan. 6 earlier in the session. For the week, bullion was down 0.1%.
US gold futures fell 0.1% to $1,875.90, Reuters reported.
Investors are awaiting US consumer price data due on February 14th.
“There remains uncertainty about the Fed’s path and gold’s move will depend on what the Fed does next,” said Ricardo Evangelista, senior analyst at ActivTrades.
If core inflation is lower than expected, it will have a negative impact on the dollar and will help gold. But if inflation does not come down, the Fed will continue to raise interest rates, which will punish gold.”
The dollar rose 0.2% against its rivals. A strong dollar tends to make gold denominated in US dollars less expensive for buyers who hold other currencies.
Although gold is considered a hedge against inflation, higher interest rates tend to increase the opportunity cost of holding a non-yielding asset.
Richmond Fed President Thomas Barkin said Thursday that tight monetary policy is “unequivocally” slowing the US economy, allowing the Fed to act “more deliberately” with any further interest rate increases.
“We expect that the rise in gold prices in the second half of the year will lead to a rise in silver prices as well,” Commerzbank analysts said in a note.
Among other precious metals, spot silver rose 0.5% to $22.08 an ounce, but was heading for its fourth consecutive weekly decline.
Palladium fell 2.1 percent to $1,595.24. Platinum rose 0.3% to $956.98, but was set for its fifth consecutive weekly decline.