Gold fell to a one-week low on Friday ahead of US consumer price data for November, with some investors expecting a higher inflation reading could prompt the Federal Reserve to start stimulus tapering and interest rate hikes earlier than anticipated.
Spot gold fell 0.2% to $1,770.90 per ounce by 0941 GMT. US gold futures fell 0.3% to $1,771.10, Reuters reported.
"The focus is on the inflation data and if we will get a strong print then the dollar should appreciate, bond yields should rise, maybe stock markets could rise as well, but the gold price will probably be down in response to it," said Commerzbank analyst Daniel Briesemann.
There are expectations that the November print could be more than 6.8% and is bound to increase pressure on the US Fed to end tapering sooner and start raising rates, Briesemann added.
Bullion was set for a fourth weekly decline, as investors exercised caution before the US Consumer Price Index report, due at 1330 GMT, and the Fed policy meeting next week.
"Gold is defending the lower end of the $1,770-$1,810 range because investors are worried about a hawkish Fed pivot, but there's still enough uncertainty around the Omicron variant, which could delay rate hiking cycles, to support gold," said Stephen Innes, managing partner at SPI Asset Management.
Although gold is considered an inflation hedge, reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of non-interest-bearing bullion.
Spot silver shed 0.3% to $21.87 per ounce, after slipping to it's lowest since Sept. 30 at $21.78.
Platinum rose 1% to $943.69 per ounce and was on track for its first weekly gain in four.
Palladium fell 1.5% to $1,784.68.
