02:00 PM EDT, 05/31/2024 (MT Newswires) -- (Updates prices.)

Gold traded lower midafternoon on Friday even as the dollar and yields sagged following fresh U.S. inflation data.

Gold for August delivery was last seen down US$20.90 to US$2,345.60 per ounce.

The U.S. Bureau of Economic Analysis on Friday released the April Personal Consumption Expenditure (PCE) Index, the Federal Reserve's preferred inflation measure. The index rose by 2.7% annualized last month, matching expectations according to Marketwatch, and unchanged from March. Core PCE, excluding volatile items, rose 0.2% from March, also matching expectations, and down from 0.3% a month earlier.

The data shows inflation remains above the Federal Reserve's 2% target rate, but the dollar and yields fell after the release, a signal traders don't see the data as an impediment to future rate cuts by the central bank. The CME Fedwatch tool sees no chance the Fed's policy committee will cut rates at its June 12 meeting, but shows odds are rising for a 25 basis-point drop as soon as September.

The ICE dollar index was last seen down 0.08 points to 104.63.

Treasury yields narrowed, with the US two-year note last seen paying 4.898%, down 3.5 basis points, while the yield on the 10-year note was down 4.4 basis points to 4.512%.