Gold dips but eyes weekly gain

12 Jul 2024 , 09:39 AM

Gold prices fell on Friday but are projected to rise for a third week in a row after lower-than-expected inflation statistics in the United States fueled speculation that the Federal Reserve will begin decreasing rates in September.

Spot gold declined 0.2% to $2,408.70 per ounce, following a 2% increase on Thursday. Gold futures fell 0.3% to $2,413.90.

Consumer prices in the United States surprisingly dipped on Thursday, with the annual gain being the smallest in a year, bringing the Fed closer to slashing interest rates.

According to the CME FedWatch Tool, bets on a September US rate drop have increased to 93%, up from 70% before the data release.

Low interest rates lower the opportunity cost of owning non-yielding bullion.

On Thursday, San Francisco Fed President Mary Daly said she anticipates further easing in both price pressures and the labour market to justify interest rate decreases, while Chicago Fed President Austan Goolsbee said the US economy appears to be back on pace for 2% inflation.

Investors are now awaiting the U.S. producer pricing index (PPI) figure, which is scheduled for 1230 GMT.

Spot silver fell 0.8% to $31.20 per ounce, having reached a more than one-month high on Thursday.

Platinum declined 0.2% to $1,001.90, while palladium fell 1% to $984.63. Both metals were expected to have weekly falls.

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