Gold headed toward its worst week in four months on Friday dropping 4% as expectations for further Federal Reserve tightening intensified.
Spot Gold Recovers Slightly After Weekly Losses
- Spot gold rose 0.6% to $3,898.84 an ounce on Friday following an in-line U.S. inflation reading, recovering slightly from a 3% plunge on Thursday.
- Markets priced in an 89.4% chance of a 25-basis-point U.S. rate hike in December, down from 96.2% prior to the producer price index data.
- Bullion shed more than 4% over the week, marking its worst performance since early June due to persistent Fed hawkishness and rising oil prices.
U.S. Inflation Data Stabilizes Gold Prices
Gold firmed on Friday as a U.S. inflation reading came in largely in line with expectations, alleviating some bets on a bigger rate hike, CNBC reported. A Reuters poll had forecast PPI climbing 0.4%.
U.S. gold futures for December delivery were up 0.5% at $3,903.00 an ounce.
Rising Oil and Inflation Fears Drive Gold Prices Down
The fall was accentuated by hotter-than-expected Consumer Price Index data earlier that week. Bullion shed more than 4% this week and logged its worst week since early June.
"It's been a tough week for gold, which may struggle to retake $4,000 with Fed hawks out in force," Wong added.
Higher interest rates tend to diminish the appeal of gold, which pays no yield.
Precious Metal Spot Price Daily Change Weekly Performance Gold $3,898.84 / oz +0.6% Down over 4% Silver $49.91 / oz -0.2% Negative Platinum $1,512.03 / oz -0.4% Negative Palladium $1,014.74 / oz +2.1% Negative Broader Metal Markets Performance
All three metals also posted losses for the week.
