Gold hovers in a narrow range ahead of US inflation data

Gold is trading in a narrow range just below $1,800 on Friday as investors await US inflation data.

Bullion prices were expected to close slightly lower this week. This is due to the return of some stockholders to the yellow metal as a safe heaven asset. The recent weakening of the dollar has also had a positive impact on gold prices.

Focus is now on the US producer price indexes (PPI) inflation data for November. These figures will likely decrease compared to the previous month. This signals that the increase in interest rates and the tightening of monetary conditions have had the intended effect.

However, any signs of sticky inflation could cause losses in the markets if the Fed's interest rate hike cycle drags on.

Rising interest rates had the biggest impact on precious metal prices this year. Gold moved away from annual highs due to rising opportunity costs of non-yielding assets.