Gold prices held steady on Friday as they looked set to log their first weekly drop in four as investors lowered expectations of a US interest rate cut after data over the week showed bubbling price pressures.
Spot gold was little changed at $2,159.99 per ounce. Bullion lost 0.8 percent for the week, in its first weekly decline since mid-February after hitting a record high of $2,194.99 last week.
US gold futures settled 0.3 percent lower at $2,161.5.
Data this week showed US consumer prices increased above expectations in February and producer prices also showed some stickiness in inflation.
“Gold has already priced in whatever positive boost it would get from expectations that interest rates are going down… if inflation starts to kick higher again, it means that policymakers are going to have to keep monetary policy more restrictive for longer,” said Everett Millman, chief market analyst at Gainesville Coins.
“Although gold does not particularly like a high interest rate environment, if the reasons for interest rates to stay that high is because inflation is running hot… that naturally means people will again turn to gold,” Millman added.