* US PPI for final demand rose 0.3% last month
* Spot gold down about 4.5% this week, the most since early June
* Silver, platinum and palladium also head for weekly declines
(Updates prices for US closing hours)
Nov 13 (Reuters) – Gold firmed on Friday as a largely in-line US inflation reading alleviated some bets on a bigger rate hike, but Thursday’s selloff to a more-than-a-year low kept bullion on track for a weekly decline.
Spot gold ticked up 0.1% at $3,879.71 per ounce as of 2:05 p.m. ET (1905 GMT), after briefly touching a session high of $3,922.97 when the US Producer Price Index data came out.
US gold futures for December delivery settled largely unchanged at $3,886.30 per ounce.
The Producer Price Index for final demand rose 0.3% last month, after an upwardly revised 1.4% surge in September, data showed on Friday. A Reuters poll had forecast PPI climbing 0.4%.
“Gold is struggling to hold initial gains from PPI as bond markets continue to struggle, confronted with Fed hawkishness,” independent analyst Tai Wong said. “PPI didn’t surprise high like last month, but core at 0.3% month-on-month remains too high for policymakers.”
Gold prices slid 3% on Thursday, hitting a more-than-one-year low, as oil climbed, spurring fears of higher inflation and elevated interest rates. The fall was accentuated by hotter-than-expected Consumer Price Index data earlier this week.
Bullion has shed about 4.5% so far this week and is poised to log its worst week since early June.
“It’s been a tough week for gold, which may struggle to retake 4,000 with Fed hawks out in force,” Wong added.
Markets see a 91.4% chance of a 25-basis-point US rate hike in December, versus 96.2% before the PPI data. The probability of a larger 50-basis-point move, however, is now seen at 8.6%, below the 13.8% chance before PPI, according to CME’s FedWatch Tool.
Higher interest rates tend to diminish non-yielding gold’s appeal.
Among other metals, spot silver fell 1.9% to $49.05 per ounce, platinum fell 1.9% to $1,490.06, while palladium climbed 1.1% to $1,004.40.
All three metals were also on course to post losses for the week.
(Reporting by Anjana Anil in Bengaluru; Editing by Shreya Biswas and Joyjeet Das)
