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Gold prices firmed above the key $1,900 level on Friday, after hitting their highest since late April after a surprise decline in U.S. consumer prices boosted bets for slower Federal Reserve interest rate hikes.

Spot gold was up 0.2% at $1,900.72 per ounce, as of 1219 GMT. The metal has risen 1.9% so far in the week, heading for a fourth straight weekly gain.

U.S. gold futures rose 0.3% to $1,903.50.

"Should the Fed fail to hit back against market expectations that peak U.S. rates is close at hand and that an eventual rate cut remains on the table, that may tempt gold bulls to hone in their sights on $2k gold," said Han Tan, chief market analyst at Exinity.

Gold prices rose as much as 1.3% on Thursday to cross the $1,900 per-ounce threshold for the first time since early May 2021, after data showed U.S consumer prices fell for the first time in more than 2-1/2 years in December.

Bullion was also supported by comments from Fed policymakers that the central bank could scale back the pace of its interest rate hikes as inflation eased further in December. However, they cautioned rates were likely to remain higher for longer.

"With the Fed still expected to hike rates at the coming meetings, we still (see) some risk of short-term price (pull)back and renewed ETF outflows," UBS analyst Giovanni Staunovo said. [GOL/ETF]

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

Helping bullion further, the dollar was on course for a weekly decline. A weaker greenback makes the dollar-priced metal cheaper for buyers holding other currencies. [USD/]

Spot silver was 0.3% lower at $23.71 per ounce, while platinum eased 0.1% to $1,067.13. Both metals were headed for a weekly drop. Palladium fell 1.6% to $1,764.30.