Gold falls as dollar strengthens ahead of key US inflation data
Gold prices fell on Friday as the dollar ticked up, while investors remained cautious ahead of key U.S. inflation data due later in the day to gauge the Federal Reserve's monetary policy trajectory.
Spot gold was down 0.6% at $3,295.99 an ounce, as of 0841 GMT. Bullion is down 1.8% so far this week.
U.S. gold futures fell 0.6% to $3,294.20.
The dollar rose 0.2% against its rivals and is on track for a weekly gain, making gold costlier for foreign buyers.
"The U.S. dollar is up slightly this morning, which could be a source of pressure for gold," said Carsten Menke, analyst at Julius Baer.
"Barring a major surprise to the PCE data, I would not expect gold to show a meaningful reaction. That said, the market seems to be a bit more nervous as of late, suggesting that volatility should stay high in the short-term." The Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation measure, is due at 1230 GMT. The data is likely to show that inflation rose 2.2% in April, according to economists polled by Reuters, compared with a 2.3% increase in March.
"With U.S. core PCE looming large, there is some hesitance to take new long positions in gold," said Tim Waterer, chief market analyst at KCM Trade.
Investors are currently anticipating 50 basis points worth of rate cuts by the end of this year, starting in October.
Zero-yield bullion tends to do well in a low-interest rate environment.
Meanwhile, a federal appeals court temporarily reinstated the most sweeping of President Donald Trump's tariffs on Thursday, a day after a U.S. trade court ruled he had exceeded his authority and ordered an immediate block.
Spot silver fell 0.6% to $33.16 an ounce, platinum eased 0.8% to $1,073.80 and palladium dropped 0.4% to $969.79.
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