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Gold's dollar strength is stable but it will gain weekly

Gold prices were not much changed on Friday due to a stronger U.S. Dollar and higher?Treasury?yields. However, bullion is still expected to gain weekly.

As of 10:05 am, spot gold was up 0.1% at $4,338.37 per ounce. ET (1505 GMT) but was on track to record a weekly increase of 0.9%. U.S. Gold Futures gained?0.1% at $4,370.10.

Dollar-priced gold is now more expensive for overseas buyers. Benchmark 10-year U.S. Treasury rates also increased.

"We are seeing some reactions to a stronger U.S. Dollar, higher yields on the curve and a slightly firmer appetite for risk since yesterday," Bart Melek said, global head of commodities strategy at TD Securities. "Markets have been consolidating under recent highs following the Fed's 25-basis point cut in December."

In November, U.S. consumer price index rose by 2.7% compared to the previous year, which was below the economists' expectations of a 3.1% rise.

Fed funds rate futures suggest 58 basis point rate cuts in 2026.

Spot silver rose 1.5% to $66.38 per ounce. It is expected to finish the week 7.2% higher than it began after hitting a record-high of $66.88 an ounce on Wednesday.

Silver's price has risen 128% in the past year, surpassing gold by 65%. This is due to strong demand for silver and supply constraints.

Melek said that "Silver's price is driven by the interest of investors in ETFs... There is a lot of?interest in calling options, which prompts market makers to hedge underlying, causing a gamma-squeeze, as we like to call it."

Gold discounts in India reached a record high of more than a month as wedding season demand was curtailed by record prices. In China, markdowns were at their steepest since August 2020.

Platinum rose 2.3% to $1960.41, after reaching a record high of more than 17 years on Thursday. Palladium dropped 0.1% to $1693 after reaching a session high of nearly three years earlier. Both metals were on track for gains this week.

(source: Reuters)