By Gina Lee

Investing.com – Gold was down on Friday morning in Asia, but was set for its biggest weekly gain in six months as continuing concerns about high inflation in the U.S. capped some losses the yellow metal.

The indices were down by 0.32% at $1,857.95 (3:41 AM GMT) at 10:41PM ET. However they are on track to record their highest weekly gain since May 7th. Normally, the inversely moving to gold moves, but Friday’s gain was a slight improvement and it reached its highest point since July 2020.

The U.S. saw inflation rise to unprecedented levels in October, when the Consumer Price Index (CPI), rose 6.2% and 0.9% respectively. Core CPI rose by 4.6% and 0.6%, respectively.

Rising inflation also challenged the Federal Reserve’s insistence that inflationary pressures will be temporary and boosted bets that the central bank will hike interest rates earlier than expected.

Even though easy monetary policy gave gold some support, it will lose its appeal if central banks raise interest rates.

In Europe, showed that the U.K.’s third-quarter GDP rose 1.3% . In comparison, the GDP grew 6.6% and 0.6%. The slower growth zeroed the focus on the Bank of England’s next move vis-a-vis interest rate hikes. Surprisingly, the BOE maintained its latest interest rate at 0.10%.

Meanwhile, Eurozone could continue to exceed the European Central Bank’s 2% target in 2022 according to Reuters economists.

Other precious metals saw silver rise 0.1%, to $25.25 an ounce. This was its highest week in three years. Although platinum was not significantly affected at $1.085.52, the metal is still on pace for its largest weekly gain in a month. Palladium gained 0.2%.