PRECIOUS-Gold rangebound as focus shifts to inflation data

Shafaq News/ Gold prices hemmed into a tight range on Friday in thin trading, as cautious traders awaited economic data due later in the day to gauge the Federal Reserve's rate hike stance.

Spot gold XAU= was little changed at $1,792.80 per ounce as of 0238 GMT. U.S. gold futures GCv1 rose 0.4% to $1,801.80.

Investors' attention turns to personal consumption expenditure (PCE) data due at 1330 GMT, for cues on inflation.

"Gold will get a boost if the data indicates that inflation has reined a little, which might raise expectations of the Fed slowing down on rate hikes," said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.

Bullion prices dropped more than 1% in the previous session after U.S. economic data highlighted the country's economy rebounded faster than previously estimated, boosting the dollar and potentially setting the Fed on a keener path to fight inflation.

Data on Thursday showed new claims for unemployment benefits rose less than expected last week in the United States, while the economy rebounded faster in the third quarter, rising 3.2% against the previously estimated 2.9%.

"The market is in a digestion tone after yesterday's data. We saw a strong move to a news that was not especially dramatic because of low liquidity in the market before the Christmas holiday," said Ilya Spivak, head of global macro at Tastytlive.

Although gold is considered a hedge against inflation and economic uncertainties, interest rates increase the opportunity cost of holding bullion since it pays no interest.

I think gold prices will be less volatile next year and expect to resume an upward trend with recession likely in the picture, Lan added.

Meanwhile, top gold consumer China reported 3,761 new symptomatic COVID-19 infections on Dec. 22, compared with 3,030 a day earlier.

Spot silver XAG= rose 0.3% to $23.63, platinum XPT= gained 0.3% to $980.01 and palladium XPD= rose 0.2% to $1,683.21.

Source: Reuters