Gold prices slip on lower US inflation figures, firmer dollar

Gold dropped on Friday on lower-than-expected US inflation figures, reducing bullion’s appeal as a hedge against inflation, while a firmer dollar also put pressure on prices.

Spot gold was down 0.3% at $4,318.19 an ounce, as of 0147 GMT, but set to end the week 0.4% higher.

US gold futures fell 0.4% to $4,346.60.

Spot silver fell 0.5% to $65.10 an ounce, but appeared poised to end the week 5% higher after touching an all-time high of $66.88 on Wednesday.

Silver has gained 125% year-to-date, outpacing gold, which has logged a 65% annual rise so far.

The dollar held steady near one-week highs, making greenback-priced precious metals more expensive for other currency holders.

“The softer inflation print was a bit of a double-edged sword (for gold and silver), in that it helps justify a dovish trajectory from the Fed, but it also means that they lose some of their appeal as an inflation hedge.

The dollar standing its ground, is also creating some resistance,“ KCM Trade Chief Market Analyst Tim Waterer.

US consumer prices rose 2.7% year-on-year in November, data showed, falling short of the 3.1% increase forecast by economists polled by Reuters.

Federal funds rate futures indicated a slightly increased chance of the Federal Reserve trimming interest rates at its January meeting, after the data.

Goldman Sachs sees gold prices climbing 14% to $4,900/oz by December 2026 in its base case, it said in a note on Thursday, while citing upside risks to this view due to a potential broadening of diversification to private investors.

Platinum rose 0.5% to $1,924.59 after touching a more than 17-year high on Thursday.

Palladium fell 1.1% to $1,677.68 after hitting a near three-year high on Thursday.

Both were set for weekly gains while palladium was on track for its best week since September 2024.

“Precious metals are in vogue, with platinum and palladium now getting in on the act and following in gold and silver’s footsteps,” Waterer added.