Dec 19 (Reuters) - Gold prices edged lower on Friday, pressured by a stronger dollar and year-end investor positioning, but were poised to end the week higher as softer U.S. inflation data boosted bets of interest rate cuts.
Spot gold fell 0.1% to $4,326.37 an ounce as of 1111 GMT, but was set to log a weekly gain of 0.6%, having climbed back to near record highs hit in October. U.S. gold futures fell 0.2% to $4,354.80.
Spot silver added 0.8% to $65.93 an ounce, set to end the week 6% higher after scaling an all-time peak of $66.88 on Wednesday.
Silver has gained 128% year-to-date on stronger industrial demand, and has outperformed gold, which has logged a 65% annual rise so far this year.
The dollar rose to over one-week highs, making greenback-priced bullion more expensive for other currency holders.
"Gold is seeing some minor pressure today likely due to some end-of-year positioning and general quietness ahead of the holidays," said Zain Vawda, analyst at MarketPulse by OANDA, adding that recent softer U.S. economic data has helped prospects of rate cuts next year.
U.S. consumer prices rose 2.7% year-on-year in November, below economists’ forecast of a 3.1% increase.
Federal Reserve Bank of Chicago President Austan Goolsbee said on Thursday that if the softer-than-expected inflation numbers can be sustained, it can open the door for more interest rate cuts next year.
Federal funds rate futures indicated a slightly increased chance of the Fed trimming rates at its January meeting, after the data.
Goldman Sachs sees gold prices climbing 14% to $4,900/oz by December 2026 in its base case, on structurally high central bank demand and cyclical support from Fed interest rate cuts, the brokerage said in a note on Thursday.
Meanwhile, gold discounts in India widened to an over one-month high as record prices curbed wedding-season demand, while Chinese markdowns reached their steepest since late August 2020.
Platinum rose 0.2% to $1,919.41 after touching a more than 17 year high on Thursday. Palladium held steady at$1,695.22 after hitting a nearly three-year high earlier in the session.
Both were set for weekly gains, with palladium on track for its best week since September 2024.
Reporting by Pablo Sinha and Ishaan Arora in Bengaluru; Editing by Alison Williams
