Gold rises on weaker dollar as inflation data cements rate-hold bets
On Friday, gold prices moved upward, signaling a positive outlook for the week. The precious metal received a boost from a weaker dollar and stable inflation figures, reducing the likelihood of an upcoming interest rate hike by the Federal Reserve. Meanwhile, oil prices also showed weekly gains, influenced by escalating tensions in the Strait of Hormuz. Precious metals such as silver and platinum…
Gold prices surged on Friday, poised for a weekly increase, as a weaker U.S. dollar and in-line inflation data bolstered expectations of a Federal Reserve rate hold. Spot gold climbed 0.7% to $4,379.95 per ounce by 1:40 p.m. EDT. The previous day saw a 1.3% drop following a peak not seen since June 5. Weekly gains for bullion stood at around 0.9%.
Commerzbank anticipates further upside potential for gold as the Fed is expected to maintain rates within the 3.50% to 3.75% range. A 33% chance of a rate hike in September, down from 55% last week, now prevails. Declining interest rates typically bolster gold. Simultaneously, tensions escalated in the Strait of Hormuz, with the United States threatening to maintain a naval blockade of Iran indefinitely.
Oil prices edged higher on this news, potentially acting as a bearish force for metals due to the risk of inflation and central bank rate hikes. Silver, platinum, and palladium also experienced gains, though palladium was set for a weekly decline.
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