Gold prices inched up a bit on Friday and were poised for a solid weekly performance. With further dismal U.S. economic data fueling predictions that the Fed will likely halt raising interest rates.

The yellow metal had dropped dramatically over the previous week, but it was poised for its best week since early October and was once again trading not far from the $2,000 per ounce mark.

Spot gold advanced by 0.2% to $1,985.60 per ounce, while gold futures inched up a bit to $1,988.05 per ounce.

This week, yellow metal prices were predicted to gain 2.5% to 3% as expectations on a definitive Fed pause were bolstered by U.S. inflation data that was lower than anticipated.

Demand for safe haven assets increased in relation to the yellow metal as worries about an impending global recession were raised by the euro zone's and Japan's dismal economic reports.

The largest increase in the yellow metal, however, was seen on Thursday when statistics revealed that, for the fourth consecutive week, U.S. unemployment claims increased more than anticipated, indicating further weakening in the labor market.

Given that the two main reasons the Fed might think about ending its rate-hike cycle are a cooling labor market and lower inflation, gold prices increased by more than 1% following the release of the data. Following the reading, the currency and Treasury yields fell sharply.