Gold drifts higher on softer dollar, eyes on U.S. data

Gold prices edged up on Friday as the U.S. dollar softened, while traders awaited economic data due later in the day to gauge the Federal Reserve’s rate-hike stance.

FUNDAMENTALS

* Spot gold was up 0.1% at $1,824.88 per ounce, as of 0049 GMT, after hitting a 2-month low in the previous session. U.S. gold futures rose 0.3% to $1,831.40.

* For the week so far, bullion is down 0.9%.

* The dollar index eased off a seven-week high hit on Thursday, making bullion less expensive for buyers holding other currencies.

* The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, continuing to signal persistently tight labour market conditions.

* Meanwhile, data on Thursday showed fourth-quarter gross domestic product growth estimate being trimmed to a 2.7% annualized rate from the previously reported 2.9% pace. * A separate report on Thursday showed the fourth-quarter personal consumption expenditures (PCE) price index accelerated at a 3.7% pace, revised up from the previously estimated 3.2% pace. The upgrades point to higher January PCE price index readings, due at 1330 GMT.

* Traders of Fed funds futures expect benchmark rates to peak at 5.343% in July and remain above 5% through the year.

* Bullion is seen as a hedge against inflation, but rising interest rates dull the non-yielding asset’s appeal.

* Spot silver rose 0.2% to $21.34 per ounce, platinum eased 0.1% to $945.94 and palladium edged 0.1% lower to $1,447.60.