Gold prices edged higher on Friday, set for a second consecutive weekly gain, as the U.S. dollar tumbled and recent economic data prompted bets that the Federal Reserve is nearing the end of its rate-hike cycle.
Spot gold was up 0.2% at $2,044.09 U.S. per ounce, early in the day, hovering near a one-year high reached on Thursday. U.S. gold futures rose 0.2% to $2,059.40.
Contributing to this movement, the dollar index, which slid to a one-year low, making bullion cheaper for buyers holding other currencies.
Data this week showed the U.S. producer price index in March dropped the most since April 2020, while the consumer price index rose less than expected.
Moreover, the number of Americans filing new claims for unemployment benefits increased more than expected last week, signaling labour market conditions were loosening as higher borrowing costs dampened demand in the economy.
These readings, along with fears of a mild recession, have helped bullion gain about 1.8% so far this week.
The CME FedWatch tool shows markets are pricing in a 66.8% chance of a 25-basis-point hike in May, with rate cuts seen in the back half of the year.