Gold dips as dollar firms ahead of US inflation data

Gold prices stayed subdued on Friday, hurt by a firm dollar and higher US Treasury yields, while investors wait for US personal consumption data later in the day, the Fed's preferred inflation gauge. Spot gold fell 0.3% to $1,890.90 per ounce by 1133 GMT. US gold futures slipped 0.2% to $1,891.50.

"Gold is under pressure for technical reasons ... and at this point seeing a temporary correction," said ActivTrades chief analyst Carlo Alberto De Casa.

While a slight recovery in the dollar is weighing on the metal, positive US economic data could also be negative for gold, as it could mean that Federal Reserve will start tapering talks soon, he added.

Data on Thursday showed improvement in the American labour market, with the number of Americans filing new claims for unemployment benefits dropping more than expected last week, bolstering expectations of economic recovery and taking some shine off bullion.

The dollar index was up 0.3%, making gold less attractive to holders of other currencies.

The US personal consumption report, the Federal Reserve's preferred inflation measure, is due later in the day.

Also due in the day is the release of US President Joe Biden's first full budget since taking office, with The New York Times reporting that he will seek $6 trillion in federal spending for the 2022 fiscal year.

Spot gold may test resistance at $1,911, Reuters technical analyst Wang Tao said.

Silver fell 0.9% to $27.60 per ounce.

Platinum slipped 0.3%, to $1,175.72, while palladium rose 0.9% to $2,830.17, after Russia's Nornickel, the world's largest palladium producer, issued its forecast for the metals market.

However, a supply surplus of platinum will be significantly smaller than predicted by Nornickel, if investment demand is taken into account, Commerzbank analyst Carsten Fritsch said in a note.