Gold prices edged higher on Friday, buoyed by a weaker dollar, but were poised for a weekly decline after hotter-than-expected U.S. producer price data dampened prospects for a super-sized September rate cut by the Federal Reserve, reports Reuters.
Spot gold rose 0.2% to $3,340.59 per ounce as of 0941 GMT. Bullion has lost 1.7% for the week. U.S. gold futures for December delivery edged up 0.1% to $3,387.50.
The U.S. dollar index fell 0.4%, making gold less expensive for other currency holders. "In the short term, gold has a heightened inverse relationship to moves in the U.S. dollar, which in turn is being whipsawed by economic data and fast news on both tariffs and Ukraine," independent analyst Ross Norman said.
U.S. producer prices increased by the most in three years in July amid a surge in the costs of goods and services, data showed on Thursday, signaling inflation pressures in the pipeline. Weekly jobless claims also came in lower than expected, at 224,000 compared to forecasts of 228,000. The data dampened bets, fanned by benign consumer price data and comments from U.S. Treasury Secretary Bessent earlier this week, that the Fed's next cut might be more than a quarter-point.
Non-yielding gold typically performs well in low-interest-rate environments.
U.S. consumer price data showed only a marginal increase in July, briefly boosting hopes for large-size rate cut by the Fed.
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