Gold prices gained on Friday, but were set for a weekly decline as the dollar climbed to a near one-month high, while investors awaited key U.S. inflation data to assess the Federal Reserve's monetary policy moving forward.
Spot gold rose 0.4% to $5,020.95 per ounce, as of 0701 GMT, and was down about 0.5% for the week so far. U.S. gold futures for April delivery were up 0.8% at $5,037.60.
"Precious metals are still very much in the minds of a lot of investors, and they're still looking to buy when prices are lower," said Brian Lan, Managing Director of GoldSilver Central, a Singapore-based dealer in physical gold and silver.
"Central banks will continue to look at gold as an asset class to hold," as geopolitical risks between the U.S. and Iran persist, Lan added.
U.S. President Donald Trump warned Iran on Thursday it must make a deal over its nuclear program or "really bad things" will happen, and set a deadline of 10 to 15 days, drawing a threat from Tehran to retaliate against U.S. bases in the region if attacked.
Goldman Sachs noted that the recent slowdown in central bank gold buying on account of heightened price volatility will most likely be temporary. The brokerage sees the medium-term trajectory for gold prices as upward, potentially with elevated volatility.
The U.S. Personal Consumption Expenditures data, the Federal Reserve's preferred inflation gauge, is now in focus for clues on U.S. monetary policy.
Several Federal Reserve policymakers were open to rate hikes if inflation remains elevated, minutes from the central bank's January policy meeting showed this week.
Traders have slightly pared back bets for a June rate cut, according to CME's FedWatch Tool.
Non-yielding bullion tends to do well in low-interest-rate environments.
Gold demand remained subdued in India this week as volatile prices deterred buyers, while other major Asian hubs, including China, were closed on account of the Lunar New Year holidays.
Elsewhere, spot silver gained 0.6% to $78.83 per ounce. Spot platinum rose 0.8% to $2,085.64 per ounce, while palladium edged 0.4% higher to $1,691.62.
Oman Observer is now on the WhatsApp channel. Click here
