Gold heads for weekly gain amid Fed rate decision

Gold prices rose slightly on Friday and were set for a weekly gain, supported by reports that China, the world’s largest gold consumer, has resumed its purchases and growing expectations that the Federal Reserve will cut interest rates at its meeting on Dec. 17-18.

Spot gold rose 0.3% to $2,688.29 per ounce by 0320 GMT. It is on track for a weekly gain of more than 2%.

Traders are now focused on the Fed’s rate decision, with a 96.4% chance of a 25 basis point rate cut, according to the CME FedWatch tool.

Gold prices fell more than 1% on Thursday amid profit-taking after the metal briefly hit a five-week high earlier in the session.

U.S. producer prices rose more than expected in November amid higher food costs. Data released on Wednesday showed that consumer prices rose by the most in seven months in November, boosting bets on interest rate cuts.