Gold prices are having their best day in weeks on Friday, boosted by a decline in the US dollar across the board. XAU/USD jumped from near $1,905 to $1,920 following the release of the US Core Personal Consumption Expenditure Price Index. The consumption inflation figures showed a decline slightly higher than expected and triggered a retreat in US yields and boosted equity and commodity prices. The US Core PCE fell in May to 4.6% on an annual basis from 4.7%, while the headline dropped from 4.6% to 3.8%. These figures softened Federal Reserve rate hike expectations for the next meeting.

The focus now turns to next week's US labor market data, which includes the ADP, Jobless Claims (Thursday), and the Nonfarm Payrolls report (Friday). XAU/USD is hovering around $1,915, up less than $10 but enough to make it the best day in weeks. The recovery took place after reaching a low on Thursday at $1,892, the lowest level in three months. On the upside, XAU/USD is breaking a short-term downtrend line. The next resistance area is $1,920. On the downside, a decline below $1,905 would weaken the short-term outlook for the yellow metal.