Gold heads for weekly loss as dollar advances

Gold prices ticked lower on Friday and 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 XAU= dipped 0.1% to $4,991.99 per ounce by 0416 GMT, and was down about 1% for the week so far. U.S. gold futures GCcv1 for April delivery were up 0.3% at $5,010.20.

"Precious metals are consolidating with a slight downward bias at this time... We've seen the dollar picking up from its lows and that led to a bit of a pressure in precious metals," said GoldSilver Central Managing Director Brian Lan.

"Even during this period when there is no China market to support gold, we've seen that prices have more or less been steady, which also tells you that there is still a lot of buying in lower levels for gold."

Markets in Mainland China, Hong Kong, Singapore and Taiwan were closed for the Lunar New Year holidays.

The dollar was set for its strongest weekly performance since October, supported by a run of stronger-than-expected economic data, a more hawkish Federal Reserve outlook and lingering tensions between the U.S. and Iran. USD/

The Personal Consumption Expenditure (PCE) data, the Fed's preferred inflation gauge, for December is now in focus for clues on U.S. monetary policy.

Markets currently expect the Fed to deliver its first rate of the year in June, according to CME's FedWatch Tool. FEDWATCH

Non-yielding bullion tends to do well in low-interest-rate environments.

Goldman Sachs said in a note that under the base case scenario, it expects central bank buying to re‑accelerate, while private investors will add exposure only in response to Fed rate cuts, driving gold higher to $5,400/troy ounce by end‑2026.

It also said it continues to see the medium-term trajectory for gold prices as upward, potentially with elevated volatility.

Elsewhere, spot silver XAG= eased 0.6% to $77.88 per ounce. Spot platinum XPT= edged 0.3% down to $2,063.63 per ounce, while palladium XPD= lost 0.4% to $1,677.71.

-Pablo Sinha/Reuters