Oil Price Surge Bolsters Fed Rate-Hike Bets, Weighs on Gold

The price of gold has stabilized at around $4,320 per ounce after falling 1.8% to its lowest since early August. The metal's value is under pressure from rising energy prices and escalating tensions in the Middle East.

Benchmark Brent crude prices have surged near $108 a barrel as Iran and the US engage in protracted conflict. This has led to higher producer price inflation, with the US data showing an 0.4% rise in August, the most since May.

The prospect of a rate hike by the US Federal Reserve at its upcoming meeting on September 15-16 has increased, with swaps traders pricing in a roughly 70% chance of a rate increase. Investors are also watching for the release of the US consumer price index due later on Friday for further clues to Fed policy.