Gold Prices Fall from Two-Month High Amid Market Expectations

Gold prices declined on Friday after reaching a two-month high in the previous session due to mild U.S. inflation data and investors locking in profits. Spot gold fell 0.5% to $4,330.37 per ounce as of 0103 GMT, while U.S. gold futures for December delivery slid 8% to $4,386.80.

The drop in prices came after the release of U.S. producer price data on Thursday, which showed that goods prices fell and service costs increased marginally. This led market expectations to stabilize around a potential interest rate hike by the Federal Reserve next month.

Cleveland Fed President Beth Hammack reiterated her view that the U.S. central bank should raise rates immediately to restrain growth and high inflation. Meanwhile, Washington's threat to maintain a naval blockade of Iran indefinitely added to economic pressure on Tehran.