Gold traded around US$4,330 on Friday after a 1.8% drop in the prior session and
could post a small rebound after a third consecutive weekly decline. A jump in
oil and a US PPI report—PPI rose 0.4% last month, the biggest gain since
May—have reinforced expectations of a Fed rate hike next week. With fighting in
the Middle East intensifying, inflationary pressure is building. Motilal Oswal
commodity analyst Manav Modi said the data indicate price pressures are
returning, partly driven by elevated energy costs, reinforcing concerns
inflation may persist. Fed swaps price roughly a 70% probability of a rate hike
next week. Investors are focused on US CPI due tonight for further policy
signals ahead of the Fed's mid-September meeting.
