Gold inches higher but heads for weekly loss on Fed hike concerns
GLD•Spot gold rose 0.2% to $3,883.05 an ounce after falling 3% on Thursday, but was down 4.4% for the week as inflation concerns reinforced expectations for higher US interest rates.
1. Gold remains on track to fall
Spot gold rose 0.2% to $3,883.05 per ounce by 0032 GMT on Friday, recovering after dropping 3% the previous session to its lowest level in more than a year. Bullion was still down 4.4% for the week. US gold futures for December delivery steadied at $3,887.
2. Rates weigh on bullion
Higher oil prices stoked inflation concerns and reinforced expectations for higher-for-longer US rates. Markets saw an 85% chance of a 25-basis-point Fed rate increase in December and a 14.5% chance of a 50-basis-point move. Higher interest rates increase the opportunity cost of holding non-yielding gold, reducing its appeal to investors.
3. Other metals also decline
Spot silver rose 0.1% to $50.07 per ounce, platinum gained 0.3% to $1,523.55 and palladium rose 0.3% to $996.84. All three metals were headed for weekly declines.
