Gold prices reached an eight-month high on Friday, holding above the crucial pivot point of $1,900 per ounce as expectations for more gradual Federal Reserve interest rate increases grew in response to declining U.S. inflation.

By 9:33 a.m. ET, spot gold increased 0.3% to $1,902.64 per ounce (1433 GMT). The metal is on track to post a fourth consecutive weekly gain after rising 2.1% so far this week.

Futures for U.S. gold increased 0.4% to $1,906.30.

Phillip Streible, chief market strategist at Blue Line Futures in Chicago, stated that “tactically, (gold) and many of the markets have a hangover from yesterday’s euphoric surge on the CPI.”

Data on Thursday showed that U.S consumer prices fell for the first time in more than 2-1/2 years in December.

Following the data, Fed policymakers expressed relief that inflation continued to ease in December, paving the way for a possible step down to a quarter point interest rate increase at its next policy meeting in February.

Lower interest rates tend to be beneficial for bullion as they decrease the opportunity cost of holding the non-yielding asset.

The U.S. dollar , meanwhile, lost ground after the inflation report and was heading for its worst week in more than a month, making gold less expensive for other currency holders.

“We believe that the (gold) market will initially take a breather until it becomes clearer whose prediction of the future course of US monetary policy is more accurate – the market’s or the Fed’s,” Commerzbank analysts said in a note.

Silver spot increased by 0.2% to $23.82 per ounce.

Palladium dropped 2.3% to $1,751.33 and platinum dropped 0.8% to $1,059.24; both metals are poised for weekly declines.

According to Streible, the market was seeking for a new catalyst to push the auto catalyst higher after it traded around $112.5 for the week.