Gold prices climbed higher on Friday as hopes about less aggressive interest stance by the Federal Reserve at the coming meetings rose after data showed a surprise contraction in the U.S. GDP in the second quarter.
The dollar drifted down, supporting gold's uptick. The dollar index dropped to 105.54 in the European session, but recovered to 106.66 in the U.S. session before paring gains and drifting down to 106.01.
Gold futures for December, the most active contract, ended higher by $12.60 or about 0.7% at $1,781.80 an ounce.
Silver futures for September closed higher by $0.329 at $20.197 an ounce, while Copper futures for September settled at $3.5735 per pound, gaining $0.0990.
Data released on Thursday had showed the U.S. economy contracting by 0.9% in the June quarter, versus expectations of a 0.5% growth. In the first quarter, the GDP had contracted by 1.6%.
A report from the Commerce Department showed an acceleration in the pace of consumer price growth. The report showed the annual rate of growth by the personal consumption expenditures price index accelerated to 6.8% in June from 6.3% in May, showing the fastest growth since January 1982.
The annual rate of growth by core consumer prices, which exclude food and energy prices, also accelerated to 4.8% in June from 4.7% in May.
The inflation data, which is said to be preferred by the Federal Reserve, was included in a report showing personal income increased by slightly more than expected in the month of June.
