Gold prices rose slightly before US inflation data, fell after PPI data

Gold prices rose slightly before the inflation data to be announced in the USA. Investors follow the signals that the Consumer Price Index (CPI) will give regarding the interest policy that the US Federal Reserve (Fed) will follow in the coming period.

Gold Type Gold Price Gram gold 6,733 TL Quarter gold 11,007 TL Republic gold 43,882 TL Ounce gold 4,303 Dollars Half gold 22,012 TL Full gold 44,275 TL Gremse gold 111,027 TL

The ounce price of spot gold increased by 0.2 percent to 4 thousand 324.79 dollars. On the other hand, the precious metal has lost more than 2 percent in value since the beginning of the week.

US gold futures contracts fell 1 percent to $4,364.70.

FED EXPECTATIONS CHANGED AFTER PPI

According to data announced on Thursday, the Producer Price Index (PPI) related to final demand increased by 0.4 percent monthly in August. The 0.1 percent increase in July was also revised upwards.

Following the above-expected PPI data, expectations that the Fed will increase interest rates at next week's meeting have strengthened. Following the data, spot gold lost approximately 2 percent in value.

Exness Financial Markets Chief Strategist Wael Makarem stated that strong inflation data could support interest rate increase expectations.

According to Makarem, the fact that the CPI is above expectations may strengthen the expectation that the Fed may increase interest rates more than once. In such a case, the rise in US Treasury bond yields and the dollar may put new pressure on gold prices.

HIGH INTEREST REDUCES THE ATTRACTIVENESS OF GOLD

Although gold is seen as a means of protection against inflation, the rise in interest rates stands out as a negative factor for the precious metal.

Rising interest rates increases the attractiveness of instruments such as bonds compared to gold, which does not earn interest. The strengthening of the dollar also puts additional pressure on gold prices.

TENSION IN WEST ASIA IS ALSO MONITORED

In addition to US inflation data, developments in West Asia are also closely followed in the markets.

It was reported that the Houthis, who are affiliated with Iran, took control of Yemen's port city of Mocha and advanced along the Red Sea coast and reached strategic islands.

While the developments in the region are pushing oil prices up, it is stated that two important oil indicators are preparing to complete the week above $100 per barrel for the first time since mid-May.

WEEKLY LOSS IN SILVER EXCEEDED 4 PERCENT

The downward trend continued in other precious metals.

Spot silver fell 0.3 percent to $63.39 per ounce. Silver's loss throughout the week exceeded 4 percent.

While platinum decreased by 0.2 percent to $1,773.93, palladium lost 0.3 percent to $1,278.51. Both precious metals are expected to end the week with a decline.