Gold prices rose more than 1% on Friday, briefly rebounding but still falling for the week
Quick Look
- Gold prices rose 1.1% to $4,363.01 an ounce on Friday, briefly rebounding from recent losses, even as strong U.S. inflation data raised expectations for a rate hike by the Federal Reserve.
- Spot silver, platinum, and palladium also rose simultaneously, but most precious metals still fell this week.
AI-generated summary
Why It Matters
Gold prices have continued to fall recently due to pressure from a stronger U.S. dollar and expectations of interest rate hikes, but briefly recovered due to a technical rebound on Friday.
Gold prices rose more than 1% on Friday (11th). (Bloomberg)
[Financial Channel/Comprehensive Report] Gold prices rose more than 1% on Friday (11th), rebounding from recent declines. Even though strong U.S. inflation data increased market expectations for the Federal Reserve to raise interest rates next week, gold prices still found short-term support.
Spot gold rose 1.1% to $4,363.01 an ounce. However, gold prices are still down about 1.5% this week.
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Tai Wong, an independent metals trader, said: "Gold prices recovered quickly after a brief decline as consumer price index (CPI) data may be consolidating market expectations for a rate hike by the Federal Reserve next week. Volatility has decreased as the market has priced in a 70% chance of a rate hike. Current price trends suggest that gold prices are finding a short-term bottom after the recent pullback."
U.S. gold futures ended almost unchanged at $4,408.90 an ounce.
Gold prices fell nearly 2% on Thursday after U.S. Producer Price Index (PPI) data released on Thursday showed that August price increases were in line with market expectations.
The U.S. Department of Labor's Bureau of Labor Statistics (BLS) said on Friday that the consumer price index (CPI) rose 0.4% last month and slightly increased 0.1% in July.
International oil prices closed higher this week. Rising oil prices will exacerbate concerns about inflation and strengthen market bets on interest rate hikes. While gold is often seen as an anti-inflation tool, higher interest rates can reduce the appeal of non-yielding gold.
Traders are currently betting on an 87% chance of a rate hike at next week's policy meeting, up from 67% before the inflation data, according to the CME FedWatch tool.
Gold demand in India has been sluggish this week as price fluctuations have deterred buyers; on the other hand, investment demand in China, the world's largest gold consumer, remains strong.
In terms of other precious metals, spot silver rose 1.6% to $64.54 an ounce, but was still down 2.6% this week.
Platinum rose 1% to $1,792.11 an ounce; palladium rose 2.1% to $1,308.63 an ounce. However, both precious metals posted losses this week.
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What to Watch
AI outlook — possibilities, not facts
The Fed will raise interest rates by 25 basis points at next week's policy meeting
Very likely · Within days
Gold will fluctuate within the range of $4,300-4,400 in the short term
Likely · Within weeks
Open Questions
- Will the Federal Reserve raise interest rates by 25 basis points as expected at next week's meeting?
- If interest rate hikes are implemented, will gold fall below key support levels again?
- Will physical demand from China and India be able to withstand interest rate pressure on precious metals?
