Gold gains as dollar weakens; still on track for fourth straight weekly loss
Spot gold was up 1.3% at $4,077.64 per ounce by 1:35 p.m. EDT (1735 GMT).
U.S. gold futures for August delivery settled 1.2% higher at $4,096.30 per ounce.
The U.S. dollar eased from recent highs after the release of the Fed’s preferred inflation gauge on Thursday. [USD/]
The U.S. Personal Consumption Expenditures Price Index surged 4.1% in the 12 months through May, matching economists’ forecasts in a Reuters poll.
Traders are pricing in about a 59% chance of a U.S. rate hike in September, lower than an earlier expectation of 64%, according to CME Group’s FedWatch Tool.
Gold is seeing a modest rebound after coming under selling pressure earlier this week, said Jim Wyckoff, a market analyst at American Gold Exchange. Higher interest rates and tighter monetary policy reduce the appeal of non-yielding bullion, as they tend to boost bond yields and increase returns on interest-bearing assets.
Spot gold hit more than a seven-month low earlier this week and prices were down 2.1% for the week.
TD Securities said in a note that given gold’s inverse relationship with both higher oil prices and a stronger U.S. dollar, sustained strength in energy markets could put further downward pressure on the precious metal in the months ahead. [O/R]
Gold started trading at a premium in India this week for the first time in a month and a half, as a price correction lifted buying, while demand stayed subdued in China, the top consumer. [GOL/AS]
Among other precious metals, spot silver rose 2.2% to $59.12 per ounce. Platinum gained 2% to $1,632.80 and palladium jumped 2.5% to $1,213.87. All three were headed for weekly declines.
