WASHINGTON (dpa-AFX) - Gold edged up slightly on Friday and headed for its sixth weekly gain as investors awaited a key U.S. inflation reading later in the day and weighed the threat of a U.S. government shutdown.
Spot gold inched up by 0.1 percent to $3,753.75 per ounce in European trade, while U.S. gold futures were up 0.3 percent at $3,783.70.
A stronger dollar capped further gains after data showed U.S. GDP grew at the fastest pace in nearly two years in the second quarter.
Strong economic data released overnight, including an unexpected drop in jobless claims, a sharp upgrade in Q2 GDP growth and a rebound in demand for U.S. durable goods after two months of declines led traders to slightly reduce their bets on Federal Reserve interest-rate cuts.
Divisions within the Fed over the path of rates also added to the uncertainty.
Fed Governor Stephen Miran is pushing for more rate cuts and said the Fed risks damage to the economy by not moving rapidly to lower interest rates. Michelle Bowman said a fragile labor market justifies more rate cuts.
On the contrary, Fed Bank of Chicago President Austan Goolsbee has expressed continued concern about tariff-driven inflation and pushed back against aggressive rate cuts.
His Kansas City counterpart Jeff Schmid noted that the Fed should focus on curbing inflation and there is no need to lower interest rates soon.
Fed Bank of Dallas President Lorie Logan has suggested the U.S. central bank should discontinue using the federal funds rate as its benchmark for implementing monetary policy.
Later in the day, the Commerce Department is scheduled to release its report on personal income and spending for August, which includes the Fed's preferred readings on consumer price inflation.
As the risk of a partial U.S. government shutdown rises, the White House budget office has threatened sharp cuts in the U.S. workforce if the Congress does not pass legislation to keep the federal government open.
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