Gold set for third straight weekly gain as Fed rate cut bets firm
US PPI due at 1230 GMT
Fed's Goolsbee says economy looks back on track to 2% inflation
Platinum, palladium set for weekly declines
Adds comment and updates prices
By Ashitha Shivaprasad
July 12 (Reuters) -Gold prices fell on Friday but were headed for a third straight week of gains as cooler-than-expected U.S. inflation data boosted hopes of the Federal Reserve cutting interest rates in September.
Spot gold XAU= slipped 0.4% to $2,404.12 per ounce, as of 0702 GMT, on profit bookingafter prices jumped 2% on Thursday.
U.S. gold futures GCcv1 fell 0.6% at $2,408.00.
Data on Thursday showed U.S. consumer prices unexpectedly fell and the annual increase was the smallest in a year, drawing the Fed another step closer to cutting interest rates.
"Inflation outlook and interest rate picture have moved in favour of gold this week. As we move closer to a lower interest rate environment, conditions could be ripe for gold to set new record highs before the year is out," said Tim Waterer, KCM Trade's chief market analyst.
Bets of a September rate cut rose to 93% compared to a 70% chance before the data was released, according to the CME FedWatch Tool.
Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.
San Francisco Fed Bank President Mary Daly on Thursday said that she expects further easing in both price pressures and the labor market to warrant interest rate cuts. Meanwhile, Chicago Fed Bank President Austan Goolsbee said the U.S. economy looks like it is back on track to 2% inflation.
Investor focus is now on the U.S. producer price index (PPI) reading due at 1230 GMT.
"The PPI figures could be key in determining which side of the $2,400 level gold ends the week at," Waterer said.
Spot silver XAG= fell 2% to $30.80 perounce, after scaling an over one-month high on Thursday.
Platinum XPT= was 1.1% lower at $993.04 and palladium XPD= was down 2.4% to $971.39.Both metals were set to register weekly declines.
Analysts at Citi see 0-3 month point-price targets at $1,050 per ounce for platinum and palladium.
Spot gold price in USD per oz https://reut.rs/4d16CqZ
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich, Varun H K and Eileen Soreng
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
