Gold prices hit a one-month high on Friday and were set for a second weekly gain as the latest U.S. data pointed to signs of slowing inflation, affirming investor expectations of the first rate cut of the year in June.
On the first day of March, spot gold edged 0.5% higher to $2,053.50 per ounce, as of 1039 GMT, its highest level since Feb. 2. U.S. gold futures firmed 0.4% at $2,062.30.
Data showed on Thursday PCE inflation in January rose 2.4%, the smallest annual increase since February 2021, after a 2.6% advance in December.
Receding inflationary pressures have helped the Fed to set the table for rate cuts likely later this year, potentially boosting demand for the non-yielding bullion.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust’s holdings fell 3.3% in February and 6.4% so far this year.
Investors will watch out for remarks from at least six more Fed officials due later on Friday.
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