Gold prices were set for a third straight weekly gain after data showing easing inflation raised expectations that the US Federal Reserve would soon start cutting interest rates, with Chair Jerome Powell’s speech later on Friday in focus.

Spot gold rose 0.6% to $2,048.36 per ounce by 0932 GMT, up about 2.3% for the week so far.

The metal rose $60 in November in its second straight monthly gain.

US gold futures for February delivery rose 0.6% to $2,068.50. “We maintain a bullish outlook for gold into 2024 in the belief rates have peaked and that Fed funds and real yields will start to trend lower,” said Ole Hansen, Saxo Bank’s head of commodity strategy.

“Gold continues to consolidate near the recent peak and the lack of correction despite yesterday’s dollar strength points to underlying demand, potentially helped by the softer PCE data.”

Data on Thursday showed US consumer spending rose moderately in October, while the annual increase in inflation was the smallest in more than 2-1/2 years.

Another report showed US jobless claims rose slightly pointing to an easing labour market and investors will be closely watching Powell’s speech which is due at 1600 GMT.

Traders have advanced their bets for a rate cut by the Fed from about an 80% chance in May to a one-in-two chance in March, CME’s FedWatch Tool shows.

Gold steadies near 7-month peak on Fed rate cut bets

Lower interest rates reduce the opportunity cost of holding gold.

Also supporting bullion, 10-year Treasury yields slipped and the dollar marked its weakest monthly performance in a year in November.

Spot silver rose 0.5% to $25.37, and platinum climbed 0.8% to $935.12 per ounce. Both were on track to log third straight weekly gains.

Palladium was up 1.1% to $1,019.32, but down about 4% for the week.