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Gold inched higher on Friday while markets awaited next week’s U.S. inflation data that could influence the Federal Reserve’s monetary policy trajectory.

Spot gold was up 0.2% to $1,864.10 per ounce by 2:34 p.m. EST (1934 GMT). U.S. gold futures for February delivery settled 0.2% lower at $1,874.50 per ounce.

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Investors await U.S. consumer price data due on Feb. 14. While concerns abound of a global recession, a strong rally in world markets suggests optimism is returning, which could ease the Fed’s rate hike cycle.

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The consumer price index edged up 0.1% in December rather than dipping 0.1% as reported last month, the Labour Department’s annual revisions of CPI data showed, while data next Tuesday is likely to show the CPI climbing 0.4% month-on-month, according to a Reuters survey of economists.

“We will have to see significant and sustained progress on the inflation front before authorities on the monetary side of things will feel comfortable to allow rates to pivot lower,” said Bart Melek, head of commodity markets strategy at TD Securities.

The dollar index is on track for a 0.7% weekly gain. Additionally, benchmark yields reached their highest in over a month.

Gold is considered a hedge against inflation, yet higher interest rates tend to increase the opportunity cost of holding the non-yielding asset.

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Money markets now expect a peak in the current Fed rate cycle at around 5.15% in July.

“Next week’s U.S. CPI report could play a huge part in where (gold) heads next, with further upward pressure on yields potentially acting as a deadweight if we break below the $1,850 support,” said Michael Hewson, chief market analyst at CMC Markets, in a note.

Spot silver rose 0.3% at $22.05 per ounce, but was headed for a fourth straight weekly drop, while palladium sank 5.4% to $1,541.05.

Platinum fell 0.9% to $945.42 and was set for a fifth consecutive weekly fall.

(Reporting by Seher Dareen in Bengaluru, additional reporting Harshit Verma; Editing by Maju Samuel and Krishna Chandra Eluri)