Gold climbs on dip buying, Fed hike bets rise after US inflation data

Elsewhere, gold demand in India was subdued this week as volatile prices discouraged buyers, while investment demand remained strong in top consumer China. GOL/AS

Among other metals, spot silver XAG= rose 2.1% to $64.86 per ounce, but was down 2% for the week.

Platinum XPT= climbed 1.5% to $1,803.94 and palladium XPD= gained 2.9% to $1,318.91. However, both metals were on track for a weekly loss.

Gold prices firmed over 1% on Friday, rebounding from recent losses and finding a short-term floor despite strong U.S. inflation data lifting expectations of a Federal Reserve rate hike next week.

Spot gold XAU= rose 1.6% to $4,385.14 per ounce by 9:23 a.m. EDT (1323 GMT). However, the metal was down about 1% for the week so far.

"Gold is recovering rapidly after a brief dip, as CPI data may be cementing expectations of a Fed rate hike next week. The volatility is somewhat muted, as market had a hike 70% priced in," said Tai Wong, an independent metals trader.

"Price action here suggests that gold is finding a short-term base after the recent retreat."

U.S. gold futures GCcv1 gained 0.5% to $4,426.90.

Prices fell nearly 2% on Thursday after the U.S. Producer Price Index data showed prices increased in line with expectations in August amid a rebound in the cost of energy products.

The Consumer Price Index increased 0.4% last month after edging up 0.1% in July, the Labor Department's Bureau of Labor Statistics said on Friday. In the 12 months through August, consumer inflation advanced 3.4% after rising by the same margin in July.