Gold is on course for its steepest weekly decline in six weeks, with rising oil prices — driven by escalating US-Iran strikes — adding to inflationary pressure and dimming expectations for US interest rate cuts.
Spot gold was up 0.5 per cent at 3,988.20 dollars an ounce as of 03:13 GMT on Friday, recovering from an earlier session low that marked its weakest level since 1 July. US August gold futures held at 3,992 dollars. Despite the partial recovery, the metal has lost 3.2 per cent since Monday, its largest weekly decline since early June.
The move came even as US consumer price index and producer price index data released this week came in below expectations — figures that would normally support gold. Surging oil prices absorbed most of the boost.
Tim Waterer, chief market analyst at KCM Trade, said the softer inflation readings failed to generate the enthusiasm traders might have expected. “Even with soft CPI and PPI numbers, rising oil prices this week meant traders simply couldn’t celebrate the lower inflation figures,” he said.
He added that the broader picture remains hostile for gold bulls. “Middle East geopolitical risks persist, and inflation and yield concerns are the dominant forces keeping gold from rising.”
Other precious metals also weakened. Spot silver fell 0.5 per cent to 55.22 dollars an ounce, platinum dropped 0.7 per cent to 1,605.62 dollars, and palladium slid 0.4 per cent to 1,244.86 dollars. All three are heading for a weekly loss.
