Gold poised for third weekly gain on Fed rate cut bets

Gold held firm near a five-week high on Friday and was set for a third straight week of gains, as US inflation data released earlier this week raised expectation that the Federal Reserve might cut interest rates further this year, reports Reuters.

Spot gold was flat at $2,715.09 per ounce, as of 0332 GMT. Bullion has gained about 1 per cent so far this week.

US gold futures slipped 0.1 per cent to $2,746.90.

On Thursday, gold rose more than 1 per cent to hit its highest since Dec. 12 after a slew of US economic data pressured Treasury yields further.

Gold has been supported by weakness in the dollar after inflation data this week sided with rate-cut expectations, said Ajay Kedia, director at Kedia Commodities in Mumbai.

"We see support at $2,694 and a breach of the $2,720 level will take prices towards $2,770 on the higher side," Kedia said.

Fed Governor Christopher Waller said three or four rate cuts are still possible this year if US economic data weakens further.

Expectations for further Fed rate cuts grew after the release of December inflation data on Wednesday and Waller's remarks on Thursday.

Spot silver rose 0.1 per cent to $30.82 per ounce, climbing more than 1 per cent this week in what would be its third consecutive weekly gain.

Palladium eased 0.1 per cent to $939.53, losing about 0.9 per cent this week. Platinum added 0.5 per cent to $936.90 but was down about 3 per cent in what could be its worst week since November.