Gold poised for 4th weekly fall as investors hone in on US inflation

Gold prices edged higher on Friday but were headed for a fourth straight weekly fall as investors kept to the sidelines ahead of key U.S. inflation data that could influence the Federal Reserve‘s next policy move.

FUNDAMENTALS

* Spot gold rose 0.1% to $1,776.23 per ounce by 0057 GMT. U.S. gold futures gained 0.1% to $1,778.60.

* Bullion prices have fallen 0.4% so far in the week as investors worried higher inflation and a tightening labour market could prompt the Fed to accelerate the pace of its asset purchase reductions.

* Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of bullion, which bears no interest.

* The closely watched U.S. inflation report, due at 1330 GMT, is expected to show the Consumer Price Index likely rose 0.7% in November from the previous month, according to a Reuters poll.

* U.S. jobless claims dropped to their lowest level in more than 52 years last week as labour market conditions continued to tighten amid an acute shortage of workers.

* European Central Bank policymakers are homing in on a temporary increase in the regular bond purchase scheme that would still significantly reduce overall debt buys once a much larger pandemic-fighting scheme ends in March, sources told Reuters.

* South Africa’s gold output was down 3.5% year-on-year in October compared to a revised 5.6% fall in September, Statistics South Africa said on Thursday. Platinum group metals production was up 24% year-on-year in October.

* Spot silver rose 0.2% to $21.97 an ounce but was headed for a fourth consecutive weekly drop.

* Platinum climbed 0.3% to $937.07, en route to its first weekly rise in four. Palladium fell 0.2% to $1,809.40.

DATA/EVENTS (GMT) 1330 US CPI MM, SA Nov 1500 US University Michigan Sentiment Dec.