Gold is expected to decline for a second consecutive week due to concerns over rising interest rates

15 Sep 2023 , 09:59 AM

On Friday, U.S. inflation readings for August confirmed market expectations for additional Federal Reserve rate hikes following an anticipated rate pause next week, putting gold prices on track to drop for a second consecutive weekly loss.

Spot gold was stable at $1,910.85 per ounce. Following a Thursday low for the metal since August 23, bullion was expected to lose 0.4% of its value for the week. At $1,932.60, U.S. gold futures were down 0.1%.

In August, U.S. producer prices rose by the greatest in more than a year, and retail sales outperformed forecasts thanks to a spike in petrol costs. This comes after last month saw the biggest increase in U.S. consumer prices in 14 months. On Thursday, the European Central Bank increased its benchmark interest rate to a record high of 4%, but made clear that this would likely be the last increase.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, reported that its holdings decreased 0.3% on Thursday. The London Bullion Market Association requested suggestions from service companies to build a safe worldwide database that would increase confidence in the value chain of the gold market. According to research by Chilean state agency Cochilco, the market would continue to be in deficit despite a 9.4% dip in global demand for silver this year, primarily due to a decrease in investment.

Silver spot increased by 0.2% to $22.67 per ounce. Palladium decreased by 0.6% to $1,244.12 while platinum increased by 0.1%, both metals seemed to be headed for weekly gains.

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