Gold Rises Ahead of US Inflation Data Release

Gold prices edged higher on Friday as investors wait for key U.S. inflation data that could signal where interest rates are heading next. But despite today's gains, gold is on track for its worst week since May, down nearly 3% so far.

Spot gold rose 0.3% to $4,138.52 per ounce by early Friday morning GMT. December gold futures climbed 0.2% to $4,152.30 per ounce. The modest uptick comes as traders position themselves ahead of inflation numbers that will likely influence Federal Reserve policy decisions.

Here's the bigger picture: Gold has been under pressure this week as investors reassess their expectations for interest rate cuts. When rates stay higher for longer, gold becomes less attractive since it doesn't pay interest like bonds or savings accounts do.

The weekly decline of 2.7% marks gold's steepest drop since May, showing how quickly sentiment can shift in precious metals markets. This pullback follows months of strong performance earlier in the year when recession fears and banking sector concerns drove investors toward safe-haven assets.

Other precious metals showed mixed results. Silver fell 0.3% to $48.76 per ounce, while platinum gained 0.6% to $1,635.59. Palladium dropped 0.3% to $1,453.16 per ounce.

For gold investors, today's inflation data will be crucial. If the numbers come in higher than expected, it could reinforce the Fed's hawkish stance and put more pressure on gold prices. Lower inflation readings might help the metal recover some of this week's losses.