Gold down 1.6 so far this week, most in three weeks
U.S. PCE data due at 1330 GMT
Silver headed for its worst week since Dec. 2023

Dec 20 Reuters Gold prices gained on Friday as the dollar pulled back from highs ahead of the U.S. Personal Consumption Expenditure data due later in the day, although Federal Reserve39;s hawkish interest rate outlook set bullion on track for a weekly loss.

Spot gold was up 0.5 at 2,605.41 per ounce, as of 0941 GMT and U.S. gold futures nudged 0.4 higher to 2,619.40.

Bullion has fallen about 1.6 this week so far, after the U.S. central bank on Wednesday projected two 25bps rate cuts by the end of 2025, which is half a percentage point less in policy easing than officials had expected in September.

The recent correction in the gold market is related to the Fed meeting, where more hawkish sentiments were voiced than expected, said Julia Khandoshko, CEO at European broker Mind Money.

Higher interest rates increase the opportunity cost of holding gold, which does not yield any interest.

If the Fed only delivers two rate cuts in 2025 we would likely need to moderate our expectations for gold demand from exchange traded funds ETFs, which could reduce the upside we still expect in bullion prices, UBS said in a note.

U.S. data on Thursday showed strongerthanexpected third quarter growth and a drop in jobless claims, further bolstering expectations of gradual Fed policy easing.

The market is now awaiting the core PCE data, the Fed39;s…