Gold prices rose on Friday as US inflation eased

Gold prices jumped ahead of Christmas. Data released on Friday showed that US inflation cooled in November. However, the Federal Reserve may not consider it as a strong argument to slow the pace of interest rate hikes. 

Personal spending increased 0.1% in November from the prior month, pointing to easing inflation. By contrast, the index climbed 0.4% in October. Analysts polled by Reuters predicted a 0.2% increase in personal spending in November.

Kitco's senior analyst Jim Wyckoff noted that analysts' forecasts are almost in line with the actual inflation rate. Rising speculative demand leads to an increase in gold prices. Investors expect large funds to buy gold at the beginning of next year.

In Wyckoff's view, bullion will have greater demand in 2023. Inflation is still weighing on the economy. However, central banks may pause the tightening cycle approximately in the middle of the year, and it will support the bullion market.