• Gold gains 1% on Friday, set to end the week with 0.20% gains.
• US PPI data was slightly above expectations, suggesting inflation is down but stalling above target, while UoM Consumer Sentiment highlights concerns over rising living costs.
• Despite higher US Treasury yields, with the 10-year note rising to 4.081%, Bullion prices remain supported as the Fed is expected to cut rates later this year.

Gold rallied over 1% on Friday, with the yellow metal set to end the week with modest gains of 0.20% after inflation data revealed on Friday and the Consumer Price Index (CPI) report on Thursday capped the Greenback’s advance. At the time of writing, XAU/USD trades at $2,658.

Mixed economic data underpinned the prices of the yellow metal. The US Bureau of Labor Statistics (BLS) revealed that prices paid by producers came near the consensus, indicating that inflation is trending down but above expectations. At the same time, the University of Michigan (UoM) Consumer Sentiment data for October showed a deterioration among Americans due to higher living costs.

Although the data didn’t affect the US Dollar, which remained firm, Bullion prices edged higher. This is even though US Treasury bond yields, particularly the 10-year T-note, gain one and a half basis points to 4.081%.

Chicago Fed President Austan Goolsbee crossed the wires on Bloomberg, praising the progress on inflation and the labor market. He added that despite the goodish September jobs report, there are no signs of overheating.

“The PPI numbers leaned friendly for the precious metals market bulls and suggest the Fed remains on track for two quarter-point interest rate cuts this year,” noted Jim Wyckoff, analyst at Kitco.