WASHINGTON (dpa-AFX) - Gold traded higher on Friday but was set for a weekly decline as the dollar and U.S. Treasury yields remained elevated amid expectations for prolonged high U.S. interest rates.
Spot gold rose 0.4 percent to $2,605.52 in European trade while U.S. gold futures were up half a percent at $2,619.79.
The dollar was set for a weekly gain after the Federal Reserve signaled a cautious approach to monetary easing in 2025.
Robust U.S. economic data released overnight also supported the Fed's hawkish stance.
A slew of data showed on Thursday that initial jobless claims fell more than expected last week, existing home sales spiked to an eight-month high and Q3 GDP revised to show a 3.1 percent increase from the previously reported 2.8 percent pace.
Markets also grappled with the impending U.S. government shutdown and U.S. President-elect Donald Trump's fresh threats of sweeping tariffs on U.S. trading partners, a key part of his presidential campaign.
Trump today warned of potential tariffs on the European Union if the bloc does not cut its growing deficit with the United States by making large oil and gas trades with the world's largest economy.
The focus now shifts to U.S. personal income and spending data for November due later in the day, which includes the Fed's preferred readings on consumer price inflation.
The report assumes significance after the Fed's new projections showed officials expect the core PCE to be stuck at 2.5 percent through 2025, significantly higher than the Fed's 2 percent target.
The University of Michigan's consumer sentiment index due later in the day may also offer additional clues on the U.S. economic outlook.
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