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Investing.com — The first weekly retreat in two months threw another lifeline at gold on Friday, helping secure the yellow metal’s hold on $1,900 territory and score a modest weekly gain of its own.

Gold’s most-active futures contract on New York’s Comex, , settled at $1946.20 ounce, up $13.30, or 0.7%, on the day. For the week, the benchmark gold futures contract rose $3.50, or 0.2%.

The , which traded as high as $1,930.90 an ounce at one point Monday, hovered at $1,924.22 by 13:55 ET (17:55 GMT). That left spot gold, which is determined by real-time trades in physical bullion, up 0.4% on the week.

Spot gold’s ability to hold on to $1,900 support came under the spotlight this week after the headline reading for the U.S. surged beyond expectations for a second month in a row, boosting concerns about inflation and the potential for the Federal Reserve to get aggressive with interest rates again.

Global markets are adjusting to a new outlook for rate hikes after the European Central Bank on Thursday raised rates to a record high of 4% even as it signaled that hike to be its last.

Markets closely watching Fed verdict on inflation 

The Fed’s policy-makers aren’t expected to raise rates when they meet on Sept. 20, not after 11 hikes that added 5.25 percentage points to a base rate of just 0.25% in February 2022.

But what Chairman Jerome Powell says at his news conference on Wednesday will be closely watched for clues on Fed think for the rest of the year, especially with two more policy meetings on the schedule for November and December.

Still, with a Fed hike seemingly out of the way for now, dollar investors sat on the sidelines while others took profit on the greenback’s rally of the past eight weeks, sending gold up instead as a hedge.

Mixed outlook for rates send mixed signals around the world

“Gold prices are surging as risk aversion percolates,” said Ed Moya, analyst at online trading platform OANDA.

“A lot of pessimism is growing across Europe and that is triggering some safe-haven flows towards gold. The key for gold is for global to retreat and that won’t happen until we get beyond next week’s central bank-a-palooza that might show the end of tightening is mostly here for the advanced world.”

U.S. consumer prices rose a second month in a row in August, reaching a year-on-year growth of 3.7% from 3.2% in July, due to high pump prices of gasoline which accounted for more than half of the increase — a phenomenon that could put renewed pressure on inflation fighters at the Fed.

The central bank’s desired inflation remains at a max 2% per year and it has vowed to get there with more rate hikes if necessary.

(Ambar Warrick contributed to this item)