Gold prices rise as traders await Fed's preferred inflation reading

Gold bars

Gold prices rose on Friday as investors await the reading of the Federal Reserve's preferred inflation index. However, gold is heading for a weekly loss due to increased demand for US debt.

February gold futures rose 0.49% to $2,620.90 an ounce at 11:21 am KSA time, although they remain nearly 2% lower for the week.

Spot gold prices added 0.44% to $2,605.39 an ounce, while silver futures for March delivery rose 0.20% to $29.47. Meanwhile, spot platinum edged down 0.22% to $922.47 an ounce.

This followed a revision by the Federal Open Market Committee (FOMC) of the US Federal Reserve, which lowered its projections for interest rate cuts in 2025 to just two cuts totaling 50 basis points, compared to September estimates of 100 basis points.

This adjustment led to the US dollar strengthening near its highest level in two years. However, the dollar index gave up some gains, falling 0.27% to 108.12 during today's trading.

A stronger dollar index—which reflects the value of the greenback against a basket of six major currencies—raises the cost of purchasing gold and other commodities in non-dollar currencies.

Gold's positive performance today, Dec. 20 was limited by increased demand for US debt, with the yield on 10-year Treasury bonds falling by 1.2 basis points to 4.558%.

Investors are also awaiting today's release of the core personal consumption expenditures (PCE) price index in the US —the Federal Reserve's preferred inflation measure. Expectations are for a 0.2% monthly rise in November, following a 0.3% rise in the previous month.