Gold prices inched up on Friday as the dollar stalled. Moreover, the expectations of a sizeable U.S. rate hike kept bullion well below the key $1,700 mark and en route to its worst week in four.
Spot gold edged up 0.6 percent at $1,673.19 per ounce.
U.S. gold futures increased 0.3 percent to $1,682.10.
“We saw the dollar turn negative… an acceleration lower on U.S. equities, which may have sparked a bit of buying”, chief market strategist at Blue Line Futures in Chicago Philip Streible stated.
Gold prices were remained down about 2.5 percent so far this week, having earlier slid to their lowest since April 2020.
Markets see a 75 percent chance of a 75-basis-point rate rise by the Federal Reserve next week and a 25 percent chance of a 100-bps increase.
“It’s likely that sudden panic about the potential for 100bps hike after the ugly CPI report contributed to the big drop,” a senior trader at Heraeus Precious Metals in New York Tai Wong added.
“However, that remains unlikely and gold is seeing physical demand pushing a short market ahead of a semi-long weekend with London out on Monday.”
Meanwhile, physical gold demand picked up in India as domestic prices drop ahead of key festivals, while Chinese premiums rose.
