Dec 19 (Reuters) - Gold prices were little changed on Friday as a stronger U.S. dollar and rising Treasury yields dented demand for the non-yielding metal, though bullion was still set for a weekly gain.
Spot gold rose 0.1% to $4,338.37 an ounce as of 10:05 a.m. ET (1505 GMT), but was set to log a weekly gain of 0.9%. U.S. gold futures also gained 0.1% to $4,370.10.
The U.S. dollar climbed to a more than one-week high, making dollar-priced bullion costlier for overseas buyers. Benchmark 10-year U.S. Treasury yields also edged higher.
"We’re seeing some reaction to a stronger U.S. dollar, higher yields along the curve, and a slightly firmer risk appetite since yesterday," said Bart Melek, global head of commodity strategy at TD Securities. "Markets are consolidating below recent highs after the Fed’s December 25-basis-point cut."
Meanwhile, U.S. consumer prices rose 2.7% year-on-year in November, below economists’ forecast of a 3.1% increase.
Federal funds rate futures indicate 58 basis points of rate cuts by the Fed in 2026. FEDWATCH/
Spot silver added 1.5% to $66.38 an ounce, set to end the week 7.2% higher after hitting a record high of $66.88 on Wednesday.
Silver has surged 128% this year, outpacing gold's 65% rise, supported by strong investment demand and supply constraints.
"Silver is driven by investor interest in ETFs ... there is a lot of interest in call options, prompting market makers to hedge the underlying, what we call a bit of a gamma squeeze here," Melek added.
Meanwhile, gold discounts in India widened to a more than one-month high as record prices curbed wedding-season demand, while Chinese markdowns reached their steepest since late August 2020.
Platinum added 2.3% to $1,960.41 after touching a more than 17-year high on Thursday. Palladium fell 0.1% to $1,693 after hitting a nearly three-year high earlier in the session. Both metals were set for weekly gains.
Reporting by Sarah Qureshi in Bengaluru. Editing by Jane Merriman
