Gold prices saw an increase on Friday and were looking at their second consecutive weekly gain after recent U.S. inflation data sparked speculation that the U.S. Federal Reserve could cut interest rates this year.
In Saudi Arabia, 24-carat gold saw a 0.13 percent rise to SAR287.57 per gram and SAR8,944.49 per ounce.
Globally, spot gold saw a 0.13 percent increase to $2,379.92 per ounce, as of 5:16 GMT, after gaining almost 0.7 percent this week. However, U.S. gold futures saw a 0.10 percent decline to $2,383.20.
Dollar weakness boosts gold
The dollar index has seen almost a 0.6 percent decline this week, making gold more affordable for holders of other currencies. Analysts believe that the upward trend in gold prices may remain as economic data prompts speculations of earlier rate cuts and geopolitical tensions persist. Therefore, the gold market is currently awaiting a new record-high in gold prices.
Inflation data boosts bullion’s appeal
This week’s economic data indicating signs of cooling inflation has provided a glimmer of hope for the U.S. Federal Reserve. However, policymakers have yet to explicitly change their stance on the timing of rate cuts, despite investors predicting that these cuts will commence within the year. Gold, traditionally viewed as an inflation hedge, is sensitive to interest rate changes, as higher rates increase the opportunity cost of holding non-yielding bullion.
Read: Oil prices steady, on track for modest weekly gains as demand outlook brightens
Other precious metals
While gold prices trend upward, other precious metals have experienced mixed movements. Spot silver saw a 0.07 percent decline to $29.58 per ounce after reaching a three-year high in the previous session. Palladium dropped 1.28 percent to $981.13 per ounce. Conversely, platinum increased by 0.26 percent to $1,059.89, having achieved its highest level since mid-May 2023, earlier in the week, and has gained approximately 7 percent so far.
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