Gold prices fell slightly on Friday but were on track for their biggest weekly gain since April, tracking sharp plunges in the greenback and U.S. benchmark Treasury yields.
Spot gold slipped 0.2 percent to $1,956.05 per ounce, while U.S. gold futures were down 0.2 percent at $1,960.
The U.S. dollar extended its slide against major rivals and Treasury yields also fell further after producer inflation data on Thursday showed the smallest annual increase in prices in nearly three years, adding to bets the Fed could soon end its monetary tightening campaign.
Earlier, data on Wednesday showed U.S. consumer price inflation fell sharply to a two-year low of 3 percent in June.
Traders now expect the Federal Reserve to stop raising interest rates after an expected 25-basis point increase at the July 25-26 meeting.
The U.S. economic calendar remains light, with reports on export and import prices and the University of Michigan's preliminary reading on consumer sentiment likely to attract investor attention later in the day.
