Gold prices rallied on Friday, recovering from a sharp decline the previous day as US inflation data came in line with expectations. Treasury yields fell, boosting the appeal of non-interest-bearing gold.
Comex gold for December delivery jumped $32.90 to $2,432.80 per ounce, having dropped $64.10 on Thursday. August gold closed at $2,385.70, up nearly 1.4%.
The US Bureau of Economic Analysis reported that the June Personal Consumption Expenditures (PCE) index, the Federal Reserve's preferred inflation gauge, rose 2.5% year-over-year, matching forecasts. The core PCE index, which excludes volatile food and energy prices, also came in at 2.6%, unchanged from May.
This data could increase expectations that the Federal Reserve will begin lowering interest rates in September from their 23-year high. However, the central bank is expected to keep rates unchanged at its meeting this week, awaiting further evidence of cooling inflation.
Treasury yields declined following the data release. The two-year note yield fell 4.1 basis points to 4.398%, and the 10-year yield dropped 4.2 basis points to 4.205%.
The US dollar weakened, with the ICE dollar index down 0.06 basis points to 104.3. The Australian dollar ended the week at around 65.50 US cents, a 2.1% decline.
Copper prices traded at $4.10 a pound on Comex, down 0.4% for the day and 3% for the week. Silver lost 4.5% for the week, closing at $28.07 an ounce.
