Gold prices rose to a six-week high on Friday after weaker than expected US inflation dampened expectations that the US Federal Reserve will aggressively raise interest rates and North Korea fired a ballistic missile, triggering safe-haven buying. Data on US second quarter gross domestic product (GDP) and labor costs also pushed the dollar lower, making bullion cheaper for holders of other currencies. "It showed a big fall in annual inflation rates across the board ... so there is no urgency for the Fed to raise interest rates," said Commerzbank analyst Carsten Fritsch. Gold is sensitive to rising rates because they push up bond yields, making non-yielding gold less attractive, and tend to boost the dollar.
Spot gold was up 0.8 percent at $1,268.84 an ounce by 1:50 pm EDT (1750 GMT), after touching $1,270.38, the highest since June 14. It was on track to rise for a third week in a row. US gold futures for August delivery settled up 0.7 percent at $1,268.40.
North Korea fired a missile on Friday in an unusual late-night test launch, and details announced by Japanese officials and media suggested it could be an intercontinental ballistic missile (ICBM). In other precious metals, silver was up 1 percent at $16.69 an ounce, on track for a third weekly gain. Platinum was 1.2 percent higher at $933.60 an ounce but set for its first weekly decline in three. Palladium was up 0.7 percent at $878.72, and was on track for its strongest weekly performance in seven weeks.
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