Gold prices recovered on Friday after declining nearly 2% in the previous session, as investors assessed the outlook for US interest rates ahead of August consumer inflation data.
At 01:59 ET (05:59 GMT), spot gold rose 0.8% to $4,351.28 an ounce, while gold futures declined 0.4% to $4,391.37. Spot silver gained 0.8% to $64.10 an ounce and platinum rose 1.1% to $1,801.18.
The US Dollar Index was little changed at 99.04.
Economists expect US headline CPI, due later on Friday, to increase 0.4% month on month in August and 3.4% year on year. Core CPI is forecast to rise 0.2% from July.
Gold Heads for Third Consecutive Weekly Decline
Gold remained on course for a third consecutive weekly decline after spot prices fell 1.8% on Thursday.
US producer price data showed the index increased 0.4% in August, in line with expectations and representing its largest increase since May.
Markets were also assessing higher energy prices ahead of the Federal Reserve’s next policy decision. Brent crude traded close to $108 per barrel amid the continuing conflict between the United States and Iran.
The source cited US strikes on Iranian oil tankers, Iranian missile attacks on a Jordanian airbase and attacks by Iran-backed Houthi forces in Yemen on Saudi infrastructure.
Money markets were pricing in approximately a 70% probability of a Federal Reserve interest-rate increase this month. This represents market expectations rather than a confirmed policy decision.
Gold ETFs Record $18 Billion of August Inflows
Investment demand for gold remained elevated in August, according to figures from the World Gold Council.
Global physically backed gold exchange-traded funds recorded inflows of $18 billion during the month, representing their second-largest monthly inflow on record.
ETF holdings increased by 121 tonnes to a record 4,189 tonnes, while assets under management rose 16% to $615 billion.
The World Gold Council said gold gained 13% during August, its third-largest monthly return in 25 years.
Tony Sycamore, senior market analyst at IG, said gold remained below its 200-day moving average of approximately $4,537. According to Sycamore’s technical assessment, the metal would need to move back above that level to indicate that the decline from its $4,697 high was ending. He said prices could otherwise move towards $4,200.