Gold prices edged up on Friday as the non-yielding metal is on track to close its best quarter since June 2020 on expectations of slower interest rate hikes by the U.S. Federal Reserve after being beaten down from record highs earlier this year.
Bullion is only down about 0.5% in 2022 as back-to-back rate hikes by the U.S. central bank pushed gold to a more than two-year low in September, but prices have pared losses since.
"The recent inflation data we've seen... shows prices starting to cool off a little bit. That's encouraging for the metals market bulls and been part of the reason we've seen the rally," said Jim Wyckoff, senior analyst at Kitco Metals.
On the last trading day of 2022, spot gold rose 0.2% to $1,818.70 per ounce, while U.S. gold futures > settled unchanged at $1,826.2.
"Weaker U.S. dollar index is supporting prices, but limiting gains is a rise in bond yields today," Wyckoff added.
The market's mood into 2023 will be driven by the response of global central banks to bubbling inflation, analysts noted.
The Fed this year has raised rates from near zero in March to a range of 4.25%-4.5% in the steepest round of rate hikes since the 1980s, pushing gold lower from a near record above $2,000 an ounce in March.
Investment in gold ETFs could improve in 2023 after this year's heavy outflows, said Vandana Bharti, assistant vice-president of commodity research at SMC Global Securities.
Spot silver fell 0.4% to $23.79 per ounce, platinum gained 0.9% to $1,063.43, while palladium dropped 1.6% to $1,784.76.
Silver and platinum were en route to ending the year on an uptick, while palladium was due for a 5.6% drop for the year.
Platinum and palladium could see a "decent bounce on the back of an economic relief rally" if recession risks look shallow, said Craig Erlam, senior market analyst at OANDA.