Investing.com - Gold inched higher on Friday, with prices tallying their first weekly gain in a month amid expectations the Federal Reserve will maintain a slower pace of interest rate hikes next year.
Gold futures for February delivery tacked on 80 cents, or around 0.1%, to settle at $1,257.90 on the Comex division of the New York Mercantile Exchange.
For the week, the precious metal gained about 0.7%, snapping a three-week losing streak.
The Fed raised interest rates for a third time this year on Wednesday, as widely expected, and indicated that it would stay on a similar path next year, disappointing some who had speculated the U.S. central bank could raise its interest rate projection for next year to four rate hikes.
The central bank also said it expected inflation to remain below its target for another year, tempering expectations for an accelerated pace of rate hikes.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Meanwhile, growing investor optimism surrounding U.S. tax reform limited gains, following reports that Republicans secured enough votes for the bill passage. The House was expected to vote on the bill on Tuesday.
Some investors expect that the tax overhaul may boost U.S. growth, leading to more interest rate hikes and a higher dollar.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 93.96 late Friday, off an earlier low of 93.28.
Elsewhere in precious metals trading, silver rallied 17.1 cents, or 1.1%, to $16.10 a troy ounce late Friday, ending the week up roughly 1.5%.
Platinum gained 1.4% to $893.90 an ounce to notch a weekly increase of around 0.7%, while palladium fell 1.2% to close at $1,016.88 an ounce. It still rose 1.9% for the week.
Among base metals, copper ended Friday up 2.2% at a three-week high of $3.139 a pound. The industrial metal scored a weekly gain of 5.3%, boosted by expectations of strong demand in top consumer China.
In the week ahead, the final reading of third-quarter U.S. growth will be the main focus for global financial markets, as investors begin to wind down trading activity before the Christmas and New Year holidays.
Meanwhile, U.S. tax reform legislation will remain on the agenda, as lawmakers work to push through a bill to overhaul the tax code ahead of a self-imposed Dec. 22 deadline.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.