Gold prices climbed on Friday after recent data supported bets for a Federal Reserve interest rate cut next month, while market participants awaited the US Producer Price Index (PPI) report for further direction.
Spot gold rose 0.5% to $2,641.70 per ounce by 0245 GMT but was down about 0.4% for the week. Prices hit a record high of $2,685.42 last month.
US gold futures gained 0.7% to $2,658.90. The dollar index fell from a two-month high, making bullion more attractive for other currency holders.
Data on Thursday showed that US consumer prices rose slightly more than expected in September, while jobless claims increased to 258,000 in the week ended Oct. 5, versus estimates of 230,000.
All eyes are now on the PPI data due at 1230 GMT.
“Gold is seeing short-term gains as recent data has been positive. If the PPI data comes in softer, gold’s momentum could continue upward,” said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.
“From a technical view point, in the near-term, gold could retest $2,657 and if it breaks above that, then test levels near its all-time high.”
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Markets currently see an 84.4% chance of a 25-basis-point rate reduction in November and a 15.6% probability of the Fed keeping rates on hold, according to CME’s FedWatch.
Lower interest rates reduce the opportunity cost of holding bullion.
Elsewhere, Israeli strikes on central Beirut on Thursday night killed 22 people, Lebanon’s health ministry said.
Analysts have noted that an escalation in the Middle East situation could further support gold, which is considered a safe asset during times of turmoil.
Among other metals, spot silver rose 0.2% to $31.25 per ounce and platinum climbed 0.9% to $975.65.
Both metals were headed for weekly declines.
Palladium climbed 1.2% to $1,082.07 per ounce and was up 1% for the week.
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