Gold prices rose on Friday and are heading for a weekly rally, supported by a weak US dollar as investors await more US economic data to assess the likelihood of a rate cut in December following hawkish comments from Federal Reserve officials.
Spot gold increased 0.3% to $4,183.31/ounce at 6:38 GMT. The precious metal has gained 4.6% so far this week.
The December US gold futures fell 0.2% to $4,185.90 an ounce.
The USD index is heading for the second consecutive week of decline against a basket of currencies, making gold more attractive to holders of other currencies.
This week, gold has been moving positively mainly due to the weakening of the US dollar and increased speculative flows as expectations of the Fed cutting interest rates, said Brian Lan, Director of GoldSilver Central.
However, the US government has reopened and, given concerns about slowing growth and inflation, expectations have shifted somewhat to the possibility that the Fed will not cut interest rates too strongly. This caused a slight correction in gold prices.
The Institute cited concerns about inflation and signs of relatively stable in the labor market after two interest rate cuts this year, and more and more Fed policymakers are giving warning signs of further easing.
Last month, the Fed cut interest rates by 25 basis points, but Chairman Jerome Powell expressed reservations about another cut this year, partly due to a lack of necessary data.
According to CME Group's FEDWatch tool, traders are now pricing in the possibility of the Fed cutting another 25 basis points next month at 51%, down from 64% in the previous session.
Gold an asset that does not yield is often moving positively in a low-interest-rate environment and period of economic instability.
The US government has reopened after a record 43-day closure, causing concerns for investors and disrupting economic data flows.
In other developments, spot silver increased 1% to 52.82 USD/ounce and is on track for its strongest week of increase since September 2024, with an increase of 9.3%.
platinum rose 0.4% to $1,586.80 on Friday and palladium rose 0.2% to $1,429.80.
