09:20 AM EDT, 07/26/2024 (MT Newswires) -- Gold moved higher early on Friday, rebounding form a day-prior drop as treasury yields weakened after the U.S. reported a key inflation measure slowed in June.

Gold for December delivery was last seen up US$23.60 to US$2,423.50 per ounce, after dropping US$64.10 a day earlier.

The US Bureau of Economic Analysis on Friday reported the June Personal Consumption Expenditures (PCE) Index, the Federal Reserve's preferred inflation measure, rose at a 2.5% annualized pace, down from 2.6% in May and in line with expectations, according to Marketwatch. The core rate, excluding volatile food and energy was at 2.6% annualized, unchanged from May and also in line with expectations.

The data is likely to firm expectations the Federal Reserve will begin lowering interest rates from 23-year highs at the September meeting of its policy committee. The group will meet next week, but is expected to leave rates unchanged as it awaits further data showing inflation is clearly moving closer to the central bank's 2% target.

Treasury yields weakened following the release, bullish for gold since it pays no interest. The U.S. two-year note was last seen down 3.9 basis points to 4.4%, while the yield on the 10-year note was down 2.9 basis points to 4.218%

The dollar was steady following the data, with the ICE dollar index last seen up 0.01 basis points to 104.36.