Gold gains as dollar weakens; still on track for fourth straight weekly loss

Gold rose on Friday as the dollar weakened and expectations of U.S. interest rate hikes eased slightly following inflation data, though prices were still on track for a fourth consecutive weekly decline.

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.