WASHINGTON (dpa-AFX) - Gold prices fell slightly on Friday as weaker-than-expected U.S. inflation data diminished bullion's appeal as an inflation hedge.
Spot gold slipped 0.1 percent to $4,327.95 an ounce but was on track for a second weekly gain on expectations of further interest rate cuts by the U.S. Federal Reserve in the new year. U.S. gold futures were down 0.2 percent at $4,355.35.
The U.S. dollar index held at one-week highs and Japan's 10-year government bond yield jumped to a 26-year peak after the Bank of Japan raised its key policy rate 25 bps to 0.75 percent, its highest level since September 1995, signaling a broader policy shift amid rising uncertainties surrounding the U.S. economy and trade policies.
Geopolitics also remained in the spotlight after the Trump administration announced a massive package of arms sales to Taiwan valued at more than USD 10 billion.
In economic releases, the core PCE price index, widely regarded as the Federal Reserve's preferred inflation gauge, along with the existing home sales report will be in focus later in the day after November's U.S. inflation report showed an unexpected decline in price growth.
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