Gold rises on bargain hunting but heads for weekly decline

 Gold rose on Friday as bargain hunting emerged after prices hit ⁠a more than one-year low in the previous session, while market focus shifted to upcoming US inflation data.

Spot gold climbed 1% to $3,915.31 per ounce by 0322 GMT but was down 3.5% so far this week. US gold futures for December delivery gained 0.9% to $3,919.60.

"Today's move is more of a positioning adjustment, given that several intraday ⁠short-term momentum indicators had kind of hit an extreme oversold level after yesterday's dramatic fall," said Kelvin Wong, a senior market analyst at OANDA.

"A short-term driver that could be bullish for gold will be a sudden turn of the US Treasury yield, that would potentially slow down the US dollar."

Spot gold prices hit their lowest level since October 2025 on Thursday as oil prices climbed on fading hopes for peace in the Middle East, spurring fears of higher inflation and elevated interest rates.

Markets see an 89% chance of a 25-basis-point US ⁠rate hike in December, while the probability of a larger 50-basis-point move is priced at 11%, according to CME's FedWatch tool.

Although gold is typically seen as an inflation hedge, higher interest rates increase the opportunity cost of holding non-yielding bullion, reducing its appeal to investors.

Federal Reserve Bank of New York President John Williams said on Thursday more rate hikes are likely as the US central bank seeks to lower high levels of inflation in an otherwise healthy economy.

Data showed the number of Americans ⁠filing new claims for unemployment benefits increased more than expected last week, but remained at a level consistent with a stable labour market.

Market participants now await the US Producer Price Index data due ⁠at 1330 GMT.

Among other metals, spot silver rose 1% to $50.49 per ounce and palladium climbed 2.1% to $1,014.50, but both were headed for weekly declines.

Spot platinum gained 1.3% to $1,538.22 and was on track for a modest ⁠weekly gain.

Reuters