LONDON Gold hit a two-week low on Friday after data showing faster-than-expected growth in U.S. consumer inflation last month helped support the case for the Federal Reserve to raise interest rates later this year.
Inflation is a key factor the U.S. central bank considers when deciding monetary policy.
While the prospect of a hike at the Fed's policy meeting next week remains remote, a new Reuters poll of 100 economists indicated a 70 percent chance of a December rise.
Spot gold slid to its lowest since Sept. 1 in the wake of the data at $1,306.38, and was at $1,307.36 an ounce at 1350 GMT, down 0.5 percent. U.S. gold futures for December delivery were down $7.30 at $1,310.70.
The precious metal is also on track for its first weekly loss in three weeks, down 1.5 percent.
"The U.S. CPI data was positive for the dollar and this has pushed the gold price lower," ThinkMarkets analyst Naeem Aslam said.
"We are trading close enough to a technical support level of $1,300, and if we break this level, it will be a bearish signal for the precious metal."
Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
The dollar gained 0.5 percent to a 10-day high against the euro after the inflation data.
Prospects for a hike could still weigh further on gold, which has rallied by nearly a quarter this year on expectations that the Fed would hold off on further rate increases.
The U.S. and Japanese central banks hold monetary policy meetings on September 20-21.
"Things are largely on hold ahead of the Fed and Bank of Japan meetings next week," Mitsubishi analyst Jonathan Butler said.
Investment appetite was soft, with holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, falling 3.3 tonnes on Thursday.
Demand for gold in India remained lacklustre this week as higher prices hampered consumer purchases, though discounts narrowed due to a correction in the spot rate.
Silver was down 1 percent at $18.75 an ounce.
Platinum was 1.7 percent lower at $1,013.20 after falling to 2-1/2-month lows earlier at $1,005. The white metal used in jewellery and autocatalysts is set to fall for a seventh straight week for the first time since 2013.
Palladium was up 0.2 percent at $655.72 an ounce.
(Additional reporting by Swati Verma and Nallur Sethuraman in Bengaluru; Editing by Dale Hudson and William Hardy)