Gold extended gains on Friday, after having rallied nearly 3 percent to a more than two-month high in the previous session.
Spot gold rose half a percent to $1,764.38 per ounce, while U.S. gold futures were up 0.8 percent at $1,767.95.
The dollar index remained under strong pressure after overnight data showed a smaller than expected increase in U.S. consumer prices in October.
U.S. consumer inflation rose 0.4 percent in October, pushing the annual increase below 8 percent for the first time in eight months.
The data raised hopes of Fed easing and a soft landing for the world's largest economy.
U.S. government bond markets remain closed today for Veterans Day.
The 10-year U.S. Treasury yields plummeted to 3.81 percent overnight, reflecting expectations that the Federal Reserve will opt for small rate hikes from December.
While traders now price in a 50-bps point hike at the Fed's policy meet in December, upcoming economic data will likely shape how long officials keep raising rates beyond December.
The U.S. economic calendar remains light, with a report on consumer sentiment due later in the session.
German consumer price inflation accelerated to 10.4 percent in October from 10.0 percent in September, final data from Destatis showed earlier today. The rate came in line with the flash estimate.
U.K. GDP shrank 0.2 percent sequentially, offsetting the 0.2 percent gain in the second quarter - according to the first estimate from the Office for National Statistics. However, the pace of decline was slower than economists' forecast of -0.5 percent.
