Gold held a weekly gain as investors weighed the outlook for inflation in the U.S. for clues on the likely pace of interest rate increases by the the Federal Reserve in 2016.
Bullion for immediate delivery traded at $1,076.33 an ounce at 8:36 a.m. in Singapore from $1,076.10 on Thursday, when it rose 0.5 percent, according to Bloomberg generic pricing. The metal gained 0.9 percent last week.
Gold has retreated 9.1 percent this year as the U.S. economy improved, which prompted the Fed to tighten monetary policy in December for the first time in almost a decade. U.S. central bankers have said that they will proceed gradually with additional moves next year. While a pickup in the pace of price gains may spur demand for gold as a hedge, rising inflation may induce higher rates, which typically hurt bullion.
The U.S. central bank’s preferred inflation index was at 0.4 percent in November, a report showed on Wednesday. It has been below the Fed’s 2 percent target for more than three years as commodities including oil tumbled.
Source : Bloomberg