Gold, silver fall on softer US inflation, firm dollar

Gold fell on Friday on lower-than-expected U.S. inflation figures, reducing bullion’s appeal as ‍a hedge against inflation, while a firmer dollar also put pressure on prices.

FUNDAMENTALS

* Spot gold lost ⁠0.3% to $4,319.07 an ounce by 01:47 GMT. U.S. gold futures fell 0.4% to $4,346.70.

* Spot silver fell 1% to $64.79 an ounce, after touching an all-time high of $66.88 on Wednesday.

* Silver has gained ‌125% year-to-date, outpacing ‌gold, which has logged a 65% annual rise.

* The dollar held steady near one-week highs, making greenback-priced bullion ‌more expensive for other currency holders.
* U.S. consumer prices rose less than expected in the year to November, but households still faced affordability challenges as the costs of basic goods and services like beef and electricity soared
* U.S. consumer prices rose 2.7% year-on-year in November, data showed, falling short of the 3.1% increase forecast by economists polled by Reuters.
* Futures on the federal funds rate indicated ‌a slightly increased ‍chance of the Federal Reserve trimming interest rates at its ‍January meeting, after the data.

* On Tuesday, data showed that ‌the U.S. unemployment rate rose to 4.6%, surpassing a Reuters poll of economists’ estimate of 4.4%, the highest since September 2021.

* Last week, the U.S. Federal Reserve delivered its third and final quarter-point rate cut of the year.

* Non-yielding assets like gold tend to do well in a low-interest-rate environment.

* Investors now await the Personal Consumption Expenditures (PCE) price index, the central bank’s ‍preferred inflation gauge later in the day, for further cues on its monetary policy path.

* Meanwhile, U.S. President Donald Trump said on ‍Thursday he interviewed ⁠Fed Governor Christopher Waller ⁠a day earlier as a candidate to succeed Jerome Powell as Fed chair, praising him as “great.”

* Waller, said earlier on Wednesday, the Fed still had more room to cut rates and would “absolutely” defend the central bank’s independence if it were challenged.

* Platinum rose 0.5% to $1,924.59, after touching a more than 17-year high on Thursday. Palladium fell 1.1% to $1,677.68 after hitting a near three-year high on Thursday.

DATA/EVENTS (GMT)

0700 UK Retail Sales MM, YY Nov

1200 UK Retail Sales Ex-Fuel MM Nov

1315 France Producer Prices YY Nov

1500 EU Consumer Confid. Flash Dec

1500 US Existing Home Sales Nov

1500 US US U Mich Sentiment Final Dec.