⁠Gold on track for third weekly loss as US inflation data looms​‌

[BENGALURU] Gold prices edged higher on Friday (Sep 11) but were headed for a third consecutive weekly fall as expectations of a US rate hike strengthened, while traders awaited US consumer price index data for further clues on the US Federal Reserve’s policy path.

Spot gold was up 0.2 per cent at US$4,324.79 per ounce by 0020 GMT, but down more than 2 per cent for the week so far. US gold futures for December delivery were down 1 per cent at US$4,364.70.

The US inflation report is due at 1230 GMT.

Data on Thursday showed that producer price index for final demand rose 0.4 per cent in August after an upwardly revised 0.1 per cent gain in July.

Following which, traders nudged up bets that the Fed will raise interest rates at its meeting next week and spot gold subsequently fell nearly 2 per cent.

“A stronger-than-expected reading would reinforce the case for several interest rate increases, potentially pushing Treasury yields and the US dollar higher and placing additional pressure on gold,” said Wael Makarem, financial markets strategists lead, Exness.

“Ongoing Middle East tensions could continue to weigh on gold through higher inflation expectations.”

Despite gold being known as an inflation hedge, rising interest rates often pressure the metal, which offers no yield.

Iran-aligned Houthis seized control of Yemen’s port city of Mocha and advanced down the Red Sea coast to strategic islands, military sources said, hours after US President Donald Trump said he expected the Iran war to end after the midterm elections.

SEE ALSO

Houthis seize strategic Yemeni port, threatening Saudi oil exports through Red Sea

Brent oil trades above US$107 as Houthi-Saudi fighting escalates

US producer prices increase as expected in August

Oil prices rose and both major benchmarks are on track to end the week at over US$100-a-barrel level for the first time since mid-May.

Among other metals, spot silver fell 0.3 per cent to US$63.39 and has lost more than 4 per cent for the week. Platinum eased 0.2 per cent at US$1,773.93 while palladium lost 0.3 per cent to US$1,278.51, with both metals headed for weekly declines. REUTERS