Gold prices moved higher on Friday following a decline of nearly 2% in the previous session, as investors awaited US consumer inflation data and assessed expectations for the Federal Reserve’s interest-rate decision next week.
At 01:59 ET (05:59 GMT), spot gold gained 0.8% to $4,351.28 an ounce, while gold futures declined 0.4% to $4,391.37. Spot silver increased 0.8% to $64.10 an ounce, while platinum rose 1.1% to $1,801.18.
The US Dollar Index was broadly unchanged at 99.04.
Economists expect headline US CPI to increase 0.4% month on month in August and 3.4% from a year earlier. Core CPI, which excludes food and energy, is forecast to rise 0.2% from July.
Fed Rate Expectations Remain in Focus
Spot gold fell 1.8% on Thursday and remained on track to record a third consecutive weekly decline.
US producer prices increased 0.4% in August, matching expectations and recording their largest monthly increase since May.
Higher energy prices were also being assessed for their potential impact on inflation. 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 an airbase in Jordan and attacks on Saudi infrastructure by Iran-backed Houthi forces in Yemen.
Markets were pricing in approximately a 70% probability of a Federal Reserve rate increase this month. The pricing reflects market expectations and does not represent a confirmed Fed decision.
Gold ETF Holdings Reach Record 4,189 Tonnes
Gold investment demand remained elevated during August, according to the World Gold Council.
Global physically backed gold exchange-traded funds attracted $18 billion during the month, representing the 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% in August, representing its third-largest monthly return in 25 years.
Tony Sycamore, senior market analyst at IG, said gold remained below its 200-day moving average near $4,537. According to his technical assessment, gold would need to recover above that level to indicate that the decline from the $4,697 high was ending. Otherwise, Sycamore said there was scope for prices to move towards $4,200.
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