Gold Edges Higher But Faces Third Weekly Loss Amid Rate Hike Expectations
Gold prices have edged higher on Friday but are still on track for their third consecutive weekly loss due to expectations of a US rate hike. The precious metal was up 0.2 per cent at $4,324.79 per ounce by 0020 GMT, but has fallen more than 2 per cent for the week so far.
The upcoming US inflation report, scheduled for release at 1230 GMT, is expected to provide further clues on the Federal Reserve's policy path. A stronger-than-expected reading would reinforce the case for several interest rate increases, potentially pushing Treasury yields and the dollar higher and placing additional pressure on gold, according to Wael Makarem, financial markets strategists lead at Exness.
Ongoing Middle East tensions could continue to weigh on gold through higher inflation expectations. Despite its reputation as an inflation hedge, rising interest rates often put downward pressure on the metal, which offers no yield.