Gold prices strengthened on Friday, poised for their best week since April 5, following recent economic data that boosted hopes for an interest rate cut by the the Federal Reserve.
Spot gold gained 0.2% to $2,350.87 an ounce by 0212 GMT after hitting a high more than two weeks earlier. Prices have increased by 2.2% since the start of the week.
U.S. gold futures rose 0.7% to $2,356.90.
Data on Thursday showed that the number of Americans filing new claims for unemployment benefits rose more than expected last week.
“Gold regained its mojo this week on softer US macroeconomic data. Initial jobless claims numbers were worse than expected, coming second only to weaker nonfarm payrolls numbers. last Friday, indicating that the jobs market may be starting to ease,” said Tim Waterer, chief market analyst at KCM Trade.
Traders expect the Fed to begin its easing cycle in September. Lower interest rates reduce the opportunity cost of holding gold.
Inflation reports have the potential to move the “needle on the expected timing of rate cuts”, if inflation turns out to be falling, gold could benefit, added Mr. Waterer.
The producer price index and the consumer price index are due next week.
There is “considerable” uncertainty about the direction that US inflation will take in the coming months, Mary Daly, president of the San Francisco Fed, said Thursday.
Separately, a senior Israeli official said the latest round of indirect negotiations in Cairo to end hostilities in Gaza had ended and Israel would continue its operation in Rafah.
Spot silver was up 0.2% at $28.38 an ounce and poised to record its best week since April 5.
Platinum firmed 0.6% to $983.78 and palladium rose 0.5% to $971.50. Both metals are on track for weekly gains.
