Gold Set For Weekly Gain

Gold prices held firm near a two-week high on Friday, and were on track for their biggest weekly gains in more than two months, as disappointing U.S. economic data released overnight added to optimism the Federal Reserve will not be in a hurry to begin scaling back its asset purchases.

Spot gold was virtually unchanged at $1,828.23 per ounce, while U.S. gold futures were down 0.2 percent at $1,827.55.

The Commerce Department said Thursday real U.S. GDP surged up by 6.5 percent in the second quarter following a 6.3 percent jump in the first quarter. Economists had expected GDP to spike by 8.5 percent.

Pending home sales dropped in June and jobless claims pulled back less than expected in the week ended July 24th, offering more evidence that the economic recovery has started to slow.

The weak data cemented investors' expectations that interest rates are going to stay low for some time. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

The dollar index hovered near a four-week low after Fed Chair Jerome Powell said earlier this week the U.S. job market still had some ground to cover before it would be time to pull back support and that the Fed was "ways away" from considering interest rate hikes.

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