Gold is gaining luster as bets of a US interest rate hike decline

Gold prices rose on Friday, heading for a fourth consecutive week of gains, supported by a weaker dollar and expectations of a slower rate hike by the Federal Reserve.

Spot gold rose 0.1 percent to $1,898.57 an ounce at 0234 GMT. Its prices have risen 1.8 percent so far this week.

As for US gold futures, it rose 0.1 percent to $1,899.60.

And the dollar index is on its way to recording the worst weekly performance since November 11, 2022. The weakness of the dollar makes gold more attractive to buyers abroad.

Data on Thursday showed that consumer prices in the United States fell for the first time in more than two and a half years in December, giving hope that inflation is on a sustainable downward trend.

The yellow metal is seen as a hedge against inflation, but higher interest rates increase the opportunity cost of holding non-yielding gold.

Philadelphia Federal Reserve Chairman Patrick Harker said Thursday that while the central bank needs to raise interest rates more to calm inflation, it will likely do so at a much slower pace. Atlanta-based council president Rafael Bostick said the inflation data could allow him to reduce the pace of interest rate hikes to a quarter point at its next meeting.

The Fed raised interest rates by 75 basis points four times last year, before slowing them to 50 basis points in December.

In terms of other precious metals, silver rose in spot transactions 0.1 percent to 23.79 dollars, while platinum rose 0.1 percent to 1068.79 dollars, while palladium fell 0.6 percent to 1780.91 dollars. All three metals are heading towards a weekly decline.