Gold eyes best week since March on hopes of less aggressive Fed

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Gold prices fell on Friday but were set for their biggest weekly gain in more than eight months as US data indicating slowing inflation bolstered hopes the Federal Reserve would slow its aggressive rate hikes .

Spot gold was down 0.2% at $1,752.17 an ounce by 0453 GMT. Prices are up 4.2% since the start of the week.

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US gold futures were little changed at $1,754.30.

The dollar index stabilized after Thursday’s fall, but was heading for its biggest weekly decline since March 2020. A weaker dollar makes gold more attractive to overseas buyers.

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Consumer prices in the United States rose less than expected in October, indicating that inflation was slowing, raising hopes that the Fed will begin to reduce its steep rate hikes.

“The weaker-than-expected CPI print supports the case for a slower pace of upside at the December Fed meeting, which may translate into a resumption of the dollar’s upward trend. downside, providing a window for gold to stage a slight rally,” said OCBC FX strategist Christopher Wong.

“Prices are slightly lower due to some profit taking. After a strong rally, gold needs to consolidate first, but if the euphoria continues, prices could rise.

Market participants now see a 71.5% chance of a 50 basis point rate hike at the December Fed meeting.

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Gold is considered a hedge against inflation, but rising interest rates increase the opportunity cost of holding non-performing bullion.

The biggest challenge facing central bankers now is to bring down inflation, International Monetary Fund Managing Director Kristalina Georgieva said on Thursday, as her deputy warned of the growing risk of economic fragmentation.

Spot silver fell 0.2% to $21.62 an ounce but was on course for its second straight weekly gain.

Platinum rose 0.5% to $1,036.84 an ounce, heading for its biggest weekly gain since February 2021. Palladium slid 0.5% to $1,954.50. (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu)



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