Gold Stabilizes as Investors Book Profits Amid Rate Hike Uncertainty

Gold prices steadied on Friday after pulling back from a two-month high as investors booked profits following a rally fueled by softer U.S. inflation data and fading expectations for a Federal Reserve rate hike in September.

The spot gold price was little changed at $4,351.45 an ounce by 11:13 GMT after the contract fell 1.3% in the previous session. U.S. gold futures for December delivery fell 0.3% to $4,407.70 per ounce.

Han Tan, chief market analyst at Bybit, said 'Gold is barely holding onto a weekly advance, as markets indulge in some profit-taking following bullion's mid-week spike to a two-month high.' He also noted that the coming week's Federal Open Market Committee meeting minutes may yet trigger fresh volatility for spot gold.

The recent rally was driven by softer U.S. inflation data and fading expectations for a rate hike in September. 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.