Gold prices held in a narrow range on Friday as investors stayed on the sidelines awaiting a key U.S. inflation print later in the day that could set the tone for the Federal Reserve policy meeting next week, reports Reuters.
Spot gold was little changed at $2,021.55 per ounce by 1301 GMT, down 0.4% so far this week. U.S. gold futures rose 0.2% to $2,021.80.
The crisis in the Red Sea, where attacks on ships by Yemen's Houthi militants have disrupted maritime trade through the Suez Canal, is leading to higher inflation expectations, said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
As a result, markets are anticipating that interest rate cuts may be delayed, or may not be as aggressive as earlier, which has meant gold is unable to perform, Shah said.
Oil prices have risen more than 6% so far this year, owing to jitters over the impact on energy supplies from escalating tensions in the Middle East.
Market participants' focus is now shifting to the Fed's preferred inflation indicator, personal consumption expenditure (PCE) data.
"Incoming data from the U.S. remains on the strong side, weighing slightly on prices, but at the same time, the rate cut expectation for the U.S. remains unchanged, keeping gold prices in balance somehow," said UBS analyst Giovanni Staunovo.
Spot silver edged down 0.1 per cent at $22.89 per ounce, platinum rose 0.7 per cent to $897.80, and palladium fell 0.6 per cent to $934.81.
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