Gold trader gold price
A gold vendor puts a golden piece on a scale inside a shop at the gold market area, as gold prices recorded an increase after the latest devaluation of the local currency in Cairo, Egypt, December 8, 2022. Image Credit: Reuters

Gold made a slight uptick on Friday but was set for a modest weekly decline as traders looked to US inflation data due next week for hints on the Federal Reserve's rate-hike path.

The Fed has tightened aggressively this year to curb inflation, which has pushed down bullion.

Gold prices made a slight rose Friday despite the uptick in the dollar and U.S. bond yields as some investors still expect the Federal Reserve will slow the pace of rate hikes from early next year.

Spot gold rose 0.5 per cent to $1,798.40 per ounce, as of 1907 GMT. US gold futures settled 0.5 per cent higher at $1,810.70.

Gold for February delivery rose $9.20 to $1,810.70 an ounce. Silver for March delivery rose 47 cents to $23.72 an ounce and March copper was unchanged at $3.88 a pound.

"The market seems to be focused on a light at the end of the tunnel, a point at which the Fed is done raising interest rates and based on that we've seen general support in gold," said David Meger, director of metals trading at High Ridge Future.

A 50-basis-point rate hike is widely expected to be delivered by the Fed at its final meeting of 2022 scheduled on December 13-14.

Rate hikes to fight soaring inflation raise the opportunity cost of holding zero-yield bullion.

How long this positive sentiment towards gold lasts will be dependent on how much the U.S. central bank increases its benchmark rate by and the rhetoric of Fed Chair Jerome Powell at the post-meeting press conference, Kinesis Money analyst Rupert Rowling said in a note.

However, data showed U.S. producer prices rose more than expected in November, adding to market uncertainty over the Fed policy outlook.

Following the data, the dollar edged up, making gold more expensive for overseas buyers, while yields on 10-year Treasury notes also gained.

Focus now shifts to the U.S. Consumer Price Index data due on December 13.

"If CPI runs hot, you might see a strong case for the Fed to deliver back-to-back half point rate increases before they pause, which might suggest gold might give back some of the gains its made over the past month," Edward Moya, senior analyst with OANDA, said in a note.

Elsewhere, spot silver rose 1.8 per cent to $23.48 per ounce, platinum climbed 2.1 per cent to $1,024.00. Palladium gained 1.7 per cent to $1,958.79.