Gold prices fell on Friday as the dollar strengthened and markets digested the latest tariff developments, while a softer inflation report kept hopes of a U.S. interest rate cut alive.

Spot gold fell 0.7%, to $3,293.59 an ounce, by 2:26 p.m. ET (1826 GMT) and is down 1.9% so far this week.

U.S. gold futures settled 0.9% lower at $3,315.40.

The dollar index rose 0.1%, making gold more expensive for holders of other currencies.

A federal appeals court temporarily reinstated President Donald Trump's most sweeping tariffs on Thursday, a day after a U.S. trade court ruled that Trump had exceeded his authority in imposing the duties and ordered an immediate block on them. "Gold is currently coming off recent highs and is in a period of consolidation," said David Meger, director of metals trading at High Ridge Futures.

"Gold is under a little bit of pressure because we see a little bit of a reduction in the need for safe havens, but it looks like there will be a significant pushback from Trump and that will ultimately help prices."

On the data front, the US Personal Consumption Expenditures (PCE) Price Index rose 2.1% year-on-year in April, compared with a 2.2% forecast.

Following the report, traders continued to bet that the US central bank will cut its target for short-term borrowing costs in September.

Bullion, which thrives in a low interest rate environment and is also used to hedge against inflation and uncertainty, hit a record high of $3,500.05 in April.

Elsewhere, demand for physical gold in India eased this week, as rising domestic prices and the end of the wedding season kept buyers on the sidelines.

Spot silver fell 1.2% to $32.94, platinum fell 2.5% to $1,055.05, and palladium fell 0.6% to $967.30. (alg)

Source: Reuters