Gold Slips From Two-Month Peak as Investors Book Profits
Gold prices fell on Friday as investors locked in gains after a two-month high, with soft US inflation data reducing expectations of a September Fed rate hike.
Gold prices eased on Friday as investors moved to lock in profits following a rally that had pushed bullion to its highest level in over two months. The pullback came after mild US inflation data tempered expectations that the Federal Reserve would raise interest rates at its September meeting.
Spot gold was down 0.5% at $4,330.37 per ounce in early Asian trading, while US gold futures for December delivery slid 0.8% to $4,386.80. The metal had climbed to its strongest point since June 5 on Thursday before settling 1.3% lower, erasing its gains for the week.
The retreat followed a US Labor Department report showing producer prices were unchanged in July, as goods prices fell and services costs rose only marginally. That data, which came on the heels of mild consumer inflation figures, reinforced market expectations that the Fed could hold rates steady next month.
However, Cleveland Fed President Beth Hammack reiterated her view that the central bank should raise rates immediately to curb growth and address inflation that remains too high.
On the geopolitical front, Washington threatened on Thursday to maintain a naval blockade of Iran indefinitely, intensifying economic pressure on Tehran as ceasefire talks have stalled.
Central banks continue to show strong appetite for gold. A US SEC filing revealed that the Bank of Korea bought and held 679,765 shares of the SPDR Gold Trust, valued at roughly $250.4 million as of end-June. This marks the bank's first disclosed gold investment since it purchased physical gold in 2013.
In Venezuela, authorities plan to focus on reconstruction and recovering gold reserves worth an estimated $4 billion held in the Bank of England's underground vaults, according to National Assembly chief Jorge Rodriguez, as monthly inflation in the country surged to 20%.
Among other precious metals, spot silver slipped 0.8% to $63.92 per ounce. Platinum decreased 1% to $1,700.60, while palladium eased 0.3% to $1,303.25, both at their lowest levels since August 4.