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

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.