Gold prices are expected to hold theirground next week, with volatility in the marketplace working in the yellowmetal’s favour.

Gold had a solid week with one seriousattempt to breach the critical psychological $1,300 level. Overall, prices areup 0.2% on the week, with February goldfutures last trading at $1,289.80.

The U.S. inflation data was the bignews on Friday  but had little impact onthe precious metal space as the consumer price index for December came in linewith expectations, down 0.1% on a monthly basis and up 1.9%, year-on-year.

Volatility in equity markets and bondyields will also continue to support gold, said Capital Economics, which hasrecently raised its year-end target to $1,350 an ounce.

“Supporting that has been a backdrop ofgeneral uncertainty around the global economy. That’s the key underpinning ourbullish forecast this year. We expect declines in equity prices and drops inbond yields and we expect investors are seeking safe havens,” said CapitalEconomics senior commodities economist Ross Strachan.

Gold is looking for another move higherbased on the metal’s consolidation just below the $1,300 level despite lastweek’s strong U.S. job numbers and continued easing trade tensions between theU.S. and China, Strachan added.

“The next time equity markets drop backsignificantly is probably the most likely catalyst for the movement able $1,300at this time,” he said.