Gold Falls Despite Rising Middle East Tensions
Gold prices rose on Friday but remained on track for a third straight weekly decline as investors awaited US consumer inflation data that could influence the Federal Reserve's decision to raise rates next week.
The spot gold price increased by 0.4% to around $4,338 an ounce in Asian trading after falling sharply on Thursday.
However, bullion is still down more than 2% this week due to higher Treasury yields and stronger rate-hike expectations that have eroded demand for the non-yielding metal.
The 10-year US yield has pushed close to 5%, while markets now see a roughly 70% chance of a September increase in interest rates.
Samer Hasn, an expert at XS.com, said that gold is being squeezed by higher global bond yields and the Middle East conflict lifting oil prices and inflation expectations.
Friday's consumer-price report is now the immediate test, with consensus estimates pointing to headline CPI rising 3.3% from a year earlier and core inflation at 2.4%.