PRECIOUS-Gold set for best week since May as inflation fears grow

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* Sleep on track for second weekly profit

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* The bullion has gained up to $110 since November 3rd

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* SocGen sees gold prices on average $1,950/oz in 1Q22 (Update Price)

Nov 12 (Businesshala) – Gold prices were on track to post their best week in six months on Friday, with bullion’s appeal burning as an inflation hedge from a spurt in US consumer prices.

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Spot gold was little changed at $1,862.50 an ounce as of 12:16 p.m. ET (1716 GMT), on the way to a weekly gain of nearly 2.5%. US gold futures fell 0.1% to $1,864.90.

Gold has risen up to $110 since November 3, fueled by inflation fears and assurances from major central banks that interest rates will remain low for the time being.

Prices fell about 1% earlier in the session.

“It’s a corrective day. Traders are taking profits after an incredible run. Logically, if you’re taking nothing off the table with a $100 rally, you’re kind of a fool,” said Blue Line in Chicago Philippe Strible, chief market strategist at Futures, said.

Bullion also eased the dollar’s strength this week as data showing a large jump in US consumer prices in October took center stage. A stronger US currency generally reduces the demand for bullion among buyers holding other currencies.

Analysts at Societe Generale forecast gold prices to average $1,950 an ounce in the first quarter of 2022, given the “renewed commitment from the Federal Reserve to support the economy while printing inflation high”.

Lower incentives and higher interest rates boost government bond yields and increase the opportunity cost of holding gold, which carries no interest.

Limiting any upside in gold, yields on the benchmark 10-year note rose higher.

Elsewhere, spot silver rose 0.1% to $25.21 an ounce and palladium rose 2.6% to $2,111.62 an ounce. Platinum fell 0.6% to $1,079.54. (Reporting by Amy Karen Daniels in Bengaluru; Editing by Arpan Varghese)

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