Gold prices were little changed during Friday's Asian deals, consolidating recent gains just below the US$5,200 an ounce level as investors awaited key United States inflation data for fresh direction.
By 3:40 pm AEDT (4:40 am GMT), spot gold was up 0.1% at US$5,187.45 per ounce, putting the precious metal on track for weekly gains of around 1.5%.
Market participants are now looking ahead to the release of the U.S. producer price index (PPI), a closely watched measure of wholesale inflation that could influence expectations for interest rate policy.
A stronger-than-expected PPI reading could temper expectations for near-term rate cuts and weigh on gold, while softer data may reinforce the current bullish bias.
Gold, a non-yielding asset, tends to benefit when interest rate expectations soften. Current market pricing suggests the Federal Reserve could lower rates at least twice this year, according to the CME Group FedWatch Tool.
Meanwhile, negotiations between Washington and Tehran over Iran’s nuclear programme remain in focus. Oman’s foreign minister, Sayyid Badr Albusaidi, who was involved in the latest round of talks in Geneva, said in a post on X: “We have finished the day after significant progress in the negotiation between the United States and Iran. We will resume soon after consultation in the respective capitals. Discussions on a technical level will take place next week in Vienna.”
Even so, investors remain cautious about the prospects for a swift agreement, limiting any sustained risk-on shift in markets.
Concerns about elevated valuations among major technology companies have also underpinned demand for defensive assets. Although Nvidia reported stronger-than-expected quarterly earnings, questions persist about the sustainability of the artificial intelligence-driven rally in tech stocks.
These factors have provided limited support to the U.S. dollar, helping gold remain near recent highs.
Looking ahead, month-end portfolio flows could generate additional volatility. Traders will also monitor comments from Federal Reserve officials for further clues on the central bank’s policy trajectory.
