Investing.com – Gold prices traded higher Friday on a weaker dollar, but remained on track to post their biggest monthly slump since September after suffering heavy losses this month.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange rose by $4.90 or 0.39%, to $1,255.90 a troy ounce.
The dollar fell sharply Friday on the back of a resurgent euro, paving the way for gold to pare some of its recent losses but gains in the yellow metal were limited by mostly upbeat U.S. economic data, reaffirming investor expectations for a faster pace of rate hikes.
The Federal Reserve's preferred inflation measure – the personal consumption expenditures (PCE) price index excluding food and energy – rose 2% in the 12 months through May.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose by 0.2% last month, the Commerce Department said on Friday, missing economists' expectations for a 0.4% rise.
But analysts at Stifel downplayed the weakness in consumer spending, citing income growth offered little evidence this was the start of a trend lower in consumer spending, adding that the stronger inflation data would support calls for a faster pace of Federal Reserve rate hikes.
"From the Fed’s point of view, stable wages coupled with a further rise in prices offers additional justification for a potentially accelerated pathway for rates," Stifel said Friday.
Gold prices were on track to post their biggest monthly slump since September as a strong uptick in the dollar this month, prompted traders to cut their bullish bets on gold.
The weakness in gold comes as its safe-haven status failed to attract demand at a time when trade war rhetoric – which has eased slightly – remained front and center as both China and U.S. pledged to enact trade restriction earlier this month.
In other precious metal trade, silver futures rose 1.03% to $16.12 a troy ounce, while platinum futures added 0.08% to $855.90 an ounce.
Copper prices fell 0.19% to $2.97.