Gold Slumps Below $4,350 on Rising Oil Prices and Hot US Inflation Data

Gold price tumbled to near $4,320 during Friday's early Asian session as rising oil prices and hotter-than-expected US PPI inflation data strengthened bets for a Federal Reserve rate hike.

The August US PPI rose 5.4% year-over-year, exceeding market consensus of 5.3%, while the core PPI matched expectations at 4.6%

According to Kyle Rodda, senior financial market analyst at capital.com, 'the PPI data sort of tells us that there has been a bit of a pickup in underlying inflation in the U.S. economy, and a part of that is due to rising energy costs.'

The increased inflation expectations have boosted the probability of an interest rate hike next week to 70%, up from 62% prior to the data release.