Gold ticks up on softer dollar, but heads for weekly fall

Gold edged higher on Friday as the dollar weakened, but the metal was still on track for a small weekly loss as investors weighed signals from the Federal Reserve on interest rates. Spot gold rose 0.2% to $4,179.19 per ounce by 0633 GMT, but was down 0.4% so far in the week. US gold futures for December delivery climbed 0.7% to $4,200.50. "Gold has been trapped in a range of $4,221, with the bottom of the range at $4,075 being met earlier this week," said Kelvin Wong, a senior market analyst at OANDA. "Inflationary trends still remain hot as the core CPI data and core PPI data for September are hitting beyond expectations." The US dollar headed for its first weekly fall in five weeks, making greenback-priced bullion more affordable for buyers overseas. US producer prices increased by the most in 4-1/2 years last month amid rising costs for goods and services, in the latest sign that inflationary pressures are broadening beyond energy-related products. The data followed Wednesday's consumer price report, which showed prices accelerated in September on a surge in gasoline costs. Traders are pricing in a 13% probability of a rate hike later this month and 89% chance of an increase in December, according to CME's FedWatch Tool. Fed Chairman Kevin Warsh voiced optimism on Friday about US economic strength and surprise about how well global economies have been "hanging in there" amid recent geopolitical shocks, despite tighter monetary policy to fight inflation. However, Chicago Fed President Austan Goolsbee said this week's stronger-than-expected inflation data had been "discouraging". While gold is considered a hedge against inflation, higher interest rates reduce the appeal of the non-yielding asset. Elsewhere, several large Indian mutual funds issued public notices late on Thursday suspending bulk subscriptions to gold exchange-traded funds. Among other metals, spot silver rose 0.5% to $57.73 per ounce, platinum gained 0.3% to $1,630.56 and palladium was up 0.8% at $1,135.11. However, all three metals headed for weekly losses.