Gold prices held steady after pulling back from a recent two-month peak, amid fading expectations of a September rate increase by the US Federal Reserve and cautious investor profit-taking following a rally driven by softer US inflation data.
Gold held steady on Friday after slipping back from a recent two-month peak, as traders locked in gains after a rally driven by softer US inflation data and waning expectations of a Federal Reserve rate increase in September. Spot gold was little changed at $4,351.45 an ounce by 1113 GMT after falling 1.3% in the previous session, while US December gold futures eased 0.3% to $4,407.70. Han Tan, chief market analyst at Bybit, said the metal was “barely holding onto a weekly advance” as investors took profits after the midweek surge, and warned that minutes from the Fed’s next policy meeting could still provoke fresh swings.
The latest price move reflects a broader pattern that has seen bullion repeatedly respond to shifting interest-rate expectations. Earlier this year, gold climbed to record levels above $3,600 an ounce as weaker labour-market data, a softer dollar and growing bets on rate cuts strengthened its appeal as a defensive asset, according to Voima Gold. ING also reported a record run that carried spot prices to intraday highs of $4,242 an ounce, supported by expectations of further easing from the Fed, central-bank buying and steady inflows into exchange-traded funds. With gold offering no yield, lower borrowing costs tend to make it more attractive to investors.
Fresh US data helped fuel the latest rally, but the tone has become more cautious. Producer prices were flat in July after a revised 0.1% fall in June, while consumer prices rose only slightly as gasoline costs declined for a second straight month. Traders are now pricing in only a 31% chance of a September rate rise, down from about 44% a week earlier, according to the CME FedWatch Tool. That has lifted bullion, but bullion dealers in India have reported wider discounts as high prices damp demand, while interest in China has remained subdued. A later Voima Gold bulletin also noted that hotter-than-expected producer-price data can quickly trim gold’s appeal when it reduces the odds of deeper Fed cuts.
Elsewhere in commodities, oil prices moved higher after Washington threatened an open-ended naval blockade on Iran, reviving supply concerns and adding another layer of uncertainty for markets already focused on monetary policy. In precious metals, spot silver rose 0.3% to $64.66 an ounce, platinum gained 0.4% to $1,724.90 and palladium added 0.2% to $1,309.28, although both industrial metals were still on course for weekly losses. Market analysts have also pointed to the continuing role of geopolitical tensions, central-bank purchases and ETF flows in keeping the broader precious-metals complex supported even when gold pauses.
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