Gold edged up on Friday and was set for its best week in seven months, deriving support from tensions in the Middle East and expectations that the US interest rates may have peaked, as markets assess latest inflation data.

Spot gold was up 0.3% at $1,873.25 per ounce by 0343 GMT. US gold futures added 0.2% to $1,885.80.

US Treasury yields and the dollar reversed course in Asia hours on Friday, having strengthened in the last session after data showed US consumer prices increased in September.

“We had the headline number only a little bit higher. The core number was lower as expected… and it doesn’t look like this really changes the calculus for the Fed at all,” said Ilya Spivak, head of global macro, Tastylive.

“We have yet to see what higher for longer means at this point. The expectation is that the rate hike cycle is now over and the signalling from the Fed that we’re getting seems to confirm that thinking.”

Before the inflation data, gold had climbed to its highest in two weeks on Thursday, boosted by dovish policy stance by top policymakers who noted that the recent rise in US Treasury yields might make further rate hikes less necessary.

Gold trims gains after US inflation data

That, along with safe-haven demand amid military clashes between Israel and the Palestinian Islamist group Hamas, set the non-yielding asset on track for a more than 2% rise this week, the most since mid-March.

Investors also assessed the latest inflation data out of China, the biggest gold consumer, which showed consumer prices faltered and factory-gate prices shrank slightly faster than expected in September, with both indicators showing persistent deflationary pressures.

Spot silver rose 0.5% to $21.94 per ounce as looked set for its first weekly gain in three.

Platinum was down 0.1% to $867.28 and palladium was flat at $1,144.28, both on path for weekly declines.