Gold set for weekly loss on inflation, rate hike fears
- Spot gold was down 0.3% at $4,200.82 per ounce
Gold prices are declining, set for a weekly loss, driven by inflation concerns and the prospect of US Federal Reserve interest rate hikes, despite some geopolitical shifts.
- Potential US Federal Reserve interest rate hikes.
- Rising US producer prices and Middle East conflict.
- Geopolitical developments between the US and Iran.
- DBS Group's new tokenized physical gold offering.
Gold prices edged lower on Friday and were on track for a weekly loss amid inflation concerns and potential US Federal Reserve interest rate hikes.
Fundamentals
Spot gold was down 0.3% at $4,200.82 per ounce, as of 0101 GMT, and was set for a weekly loss of 2.8%.
US gold futures for August delivery rose 2.6% to $4,222.10.
Gold fell to an over six-month low on Thursday before closing higher at $4,219.69 as US President Donald Trump called off planned military strikes on Iran and signalled an imminent peace deal.
President Donald Trump on Thursday said the United States and Iran could sign a peace deal as soon as this weekend that would reopen the Strait of Hormuz to shipping, but Iran countered that it had not reached a final decision on an agreement.
US producer prices increased more than expected in May, leading to the largest annual gain in 3-1/2 years as the Middle East conflict drove up the cost of energy products.
Traders are currently pricing a 60% chance of a US rate hike in December, according to the CME Group’s FedWatch tool.
While gold is seen as a hedge against inflation, higher interest rates tend to weigh on the non-yielding metal.
DBS Group, Singapore’s biggest bank by assets, said on Thursday it will offer tokenised physical gold to retail customers as demand for the precious metal grows and the city-state pushes to become a gold trading hub.
Spot silver fell 0.4% to $67.11 per ounce, platinum gained 0.3% to $1,724.45, while palladium rose 1% to $1,281.75.