Gold Falls Back Amid Weakened Inflation Expectations

Gold prices retreated on Friday after reaching a two-month high in the previous session due to mild US inflation data and expectations of no interest rate hike from the Federal Reserve.

The spot price of gold fell by 0.5% to $4,330.37 per ounce as investors locked in profits. U.S. gold futures for December delivery slid 0.8% to $4,386.80.

The decline came after a report from the US Labor Department showed that producer prices were unchanged in July due to falling goods prices and marginal increases in service costs.

Cleveland Fed President Beth Hammack reiterated her view that the Federal Reserve should raise rates immediately to restrain growth and high inflation, going against market expectations of no rate hike next month.