Spot gold rose 0.6% to $1,837.25 per ounce by 1503 GMT, heading for second week of gains. US gold futures climbed 0.7% to $1,836.10.
“After a long period of (data) beating expectations, it’s quite likely we’re going to maybe have some disappointments like we did today, or with the payrolls (data). And that could ultimately move the yield curve lower and help gold,” said Bart Melek, head of commodity strategies at TD Securities.
Gold could “start hitting technical levels around $1,850, that could propel it significantly higher,” Melek added.
The yield on benchmark 10-year US Treasury notes fell, bolstering appeal for non-yielding gold. The dollar index shed 0.5% after a report that April US retail sales unexpectedly stalled, making bullion cheaper for those holding other currencies.
Key US economic readings this week showed a bigger-than-expected rise in consumer prices and weekly jobless claims dropping to a 14-month low, intensifying concerns over rising inflation and prospects of higher interest rates.
Federal Reserve officials, however, have maintained they expect any rise in inflation to be short-lived, while pledging to keep rates low until the economy reaches full employment.
“The Fed is not going to throw the economic recovery off course by raising rates,” StoneX analyst Rhona O’Connell said. “There’s too much risk involved to start either aggressive tapering or raising rates because there is not enough underlying strength in the economy.”
“We’ve got global issues, and particularly with uncertainties over places like Brazil and India.”
India’s tally of coronavirus infections climbed past 24 million on Friday, with widespread restrictions also taking a toll on physical gold demand.
Elsewhere, palladium rose 0.8% to $2,885.01 per ounce but was headed for its biggest weekly decline since February-end.
Both silver and platinum were up 0.9% at $27.30 and $1,216.75 per ounce, respectively.