*Gold down 1% this week so far*U.S. Jan PCE data due at 1330 GMT*Fed rates seen peaking at 5.338% in July(Adds comments and details, updates prices)Feb 24 (Reuters) – Gold prices inched lower on Friday as investors fretted that a recent slate of stronger-than-expected economic data from the United States could make the Federal Reserve keep raising interest rates for longer.Spot gold was down 0.1% at $1,821.80 per ounce, as of 0745 GMT. U.S. gold futures rose 0.2% to $1,831.00.Bullion is likely to decline for a fourth straight week and is down about 1% for the period.“There’s been a meaningful hawkish shift in the way that markets perceive this whole string of economic data releases… enough for markets to conclude that the Fed might be looking at higher-for-longer interest rates,” said Ilya Spivak, head of global macro at Tastylive.“That has weighed very heavily on gold.”Bullion is seen as a hedge against inflation, but rising interest rates dull its appeal as they increase the opportunity cost of holding the non-yielding asset vis-a-vis bonds.Data on Thursday showed U.S. GDP increased at a revised 2.7% annualized rate last quarter, while new claims for unemployment benefits unexpectedly fell last week.Separately, data showed fourth-quarter personal consumption expenditures (PCE) price index rose 3.7%, revised up from a previous estimate of 3.2%.Thursday’s reports are the latest in a flurry of data that have fuelled concerns that interest rates would stay higher for longer.Traders of Fed funds futures expect benchmark rates to peak at 5.338% in July and remain above 5% through the year.The Fed’s preferred inflation measure, the PCE data for January, is due at 1330 GMT and will be closely watched.“It may take a significant outperformance (in core PCE numbers) to sway market expectations further,” said Yeap Jun Rong, a market analyst at IG.“A lower-than-expected read could see some paring back of hawkish bets, which could prompt renewed upside in gold.”The dollar index steadied, making bullion more expensive for overseas buyers.Spot silver lost 0.5% at $21.19 per ounce, platinum fell 0.3% to $944.32 and palladium shed 0.8% to$1,438.19 per ounce. (Reporting by Kavya Guduru in Bengaluru; Editing by Uttaresh.V, Vinay Dwivedi and Nivedita Bhattacharjee)
