Gold Prices Slip as Investors Lock In Profits

Gold prices slipped on Friday and were headed for their first weekly loss in four weeks as investors locked in profits after mild U.S. inflation data propelled bullion to its highest level since June.

The non-yielding metal got a boost after an unexpected drop in U.S. July nonfarm payrolls last week, followed by softer inflation data this week, sharply reducing expectations of a rate hike next month.

U.S. producer prices were unchanged in July, following a revised 0.1% drop in June, while U.S. consumer prices barely increased last month as the cost of gasoline declined for a second consecutive month.

The weaker inflation data reduced the case for a near-term Federal Reserve rate hike, which made gold more attractive relative to yield-bearing assets.