Prices for gold rose on Friday as concerning U.S. economic data stimulated some interest in the safe-haven metal, but was likely to log a monthly drop on bets for aggressive interest rate hikes by the U.S. Federal Reserve.
Spot gold was up 1.2% at $1,916.50 U.S. per ounce, but had lost about 1% so far this month. U.S. gold futures were up 1.4% at $1,918.40.
What’s more, experts are saying disappointing U.S. gross domestic product numbers could take some pressure off the Fed to tighten quite as aggressively as it has hinted, a rhetoric that has pressured gold in recent weeks.
Fed officials have aligned around plans to accelerate the pace of interest rate hikes this year but remain split over what could be the make-or-break decision of where to stop to avoid dragging the economy into recession.
Higher short-term U.S. interest rates and bond yields increase the opportunity cost of holding zero-yield bullion.
Gold prices were reportedly headed for a monthly drop, as the dollar and U.S. 10-year Treasury yields have strengthened this month.
A stronger dollar makes greenback-priced gold less attractive for other currency holders. The dollar steadied off a 20-year high it reached against rivals in the previous session.