WASHINGTON (dpa-AFX) - Gold prices rose on Friday and were on track for a weekly gain amid optimism that the Fed will ease the interest rate by at least 25 points in September.
A weaker dollar and heightened tensions in the Middle East also boosted bullion' safe-haven appeal.
Spot gold edged up 0.2 percent to $2,462.12 per ounce while U.S. gold futures were up 0.3 percent at $2,499.75.
The dollar edged lower in European trade as strong retail sales and weekly jobless claims figures helped quell fears of a looming U.S. recession but prompted traders to lower their expectations of aggressive Federal Reserve interest-rate cuts this year.
Markets are now pricing in just a 25 percent chance of a 50-basis-point cut by the Federal Reserve next month, down from 55 percent a week ago, according to the CME FedWatch tool.
Analysts say that the labor market would need to weaken further for the Federal Reserve to cut rates by more than 25 basis points in September.
In economic releases, U.S. housing starts for July, building permits for July and the University of Michigan's consumer sentiment index for August are slated for release in the New York session.
Traders' attention now shifts to the annual Jackson Hole Economic Symposium, which traditionally brings together the heads of the world's leading central banks. This year's event will be held on August 22-24.
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