Gold Edges Higher but Remains Vulnerable to US Rate Hike Expectations
Gold prices rose slightly on Friday, but were still set to decline for the third consecutive week. The precious metal has been under pressure due to expectations of a US rate hike, which would strengthen the dollar and weigh on gold.
The US inflation report is scheduled to be released at 1230 GMT, and traders are closely watching it for clues on the Federal Reserve's policy path. A stronger-than-expected reading could reinforce the case for interest rate increases, potentially pushing Treasury yields higher and putting additional pressure on gold.
Wael Makarem, financial markets strategist lead at Exness, noted that 'a stronger-than-expected reading would reinforce the case for several interest rate increases...'
Ongoing Middle East tensions could also continue to weigh on gold through higher inflation expectations. Despite its reputation as an inflation hedge, rising interest rates often pressure the metal, which offers no yield.