Gold Prices Edge Higher but Set for Weekly Loss on Reduced Fed Cut Hopes
Gold prices inched higher during Asian trading hours on Friday but remained on track for a weekly decline. The drop comes as traders scaled back expectations for a large Federal Reserve rate cut next month. Investors also awaited the outcome of U.S.-Russia talks set to begin later in the day.
Spot gold rose 0.3% to $3,344.88 per ounce, while December gold futures gained 0.2% to $3,391.17 by 01:41 ET (05:41 GMT). Despite the uptick, bullion was still heading for a 1.5% weekly loss, driven largely by a sharp drop earlier in the week after President Donald Trump confirmed that gold bars would not be subject to tariffs.
Strong U.S. PPI Dampens Fed Cut Bets
Gold slipped 0.6% on Thursday after hotter-than-expected U.S. producer price index (PPI) data for July reduced the likelihood of an outsized Federal Reserve rate cut in September.
Earlier in the week, mild consumer inflation figures had boosted hopes for rate cuts. While markets still see a 25 basis point cut next month as the most likely outcome, the probability has fallen from near certainty. Expectations for a 50 basis point cut have also weakened.
Higher interest rates tend to weigh on gold prices because they increase the appeal of interest-bearing assets over non-yielding bullion.
Trump-Putin Meeting in Focus
Market attention now turns to the Anchorage, Alaska summit between Trump and Russian President Vladimir Putin. Trump has warned of “severe consequences” if Russia resists peace efforts in Ukraine.
A positive breakthrough could ease demand for gold as a safe-haven asset, while any sign of stalled negotiations or rising tensions could push bullion prices higher.
Other Precious Metals Mixed
- Platinum futures rose 0.2% to $1,367.20/oz
- Silver futures were flat at $38.073/oz
- London copper futures held at $9,793.05/ton
- U.S. copper futures were steady at $4.50/lb
