Gold set for best week since January as inflation fears ebb
GLD•Other precious metals also rise
Spot silver XAG= climbed 4.5% to $64.26, platinum XPT= rose 2.4% to $1,770.20 and palladium XPD= gained 2.3% to $1,401.71. All three metals were headed for weekly gains.
Gold heads for biggest weekly rise since January
Gold gained more than 1% on Friday and was on track for its biggest weekly rise since January, as expectations of U.S. rate hikes receded and inflation worries tied to the U.S.-Iran peace deal eased, with investors also awaiting U.S. nonfarm payrolls data.
Spot gold XAU= was up 1.6% at $4,308.92 per ounce by 0845 GMT, after hitting a seven-week high on Thursday. Prices have gained over 6.6% for the week so far.
U.S. gold futures GCcv1 rose 1.6% to $4,367.90.
"Gold is a derivative of Fed policy expectations at the moment. The marginal drop in the implied probabilities of Fed rate hikes, along with the belief that Chairperson Warsh may be less of a policy hawk than expected, has driven the metal higher," said Kyle Rodda, a senior financial market analyst at Capital.com.
Traders currently see a 55% chance of a U.S. rate hike in September, compared to 67% last week, according to the CME FedWatch Tool.
U.S. President Donald Trump told reporters that he believed the war with Iran would be over soon.
Crude oil prices were headed for a weekly loss. Falling energy costs can alleviate inflation concerns, leading investors to scale back bets on higher interest rates. Although gold is regarded as an inflation hedge, its appeal tends to diminish in a high-rate environment since it offers no yield. O/R
The U.S. Labor Department's nonfarm payrolls report for July is due at 1230 GMT.
"Bullion may pare some of this week's gains, with its 50-day SMA potentially offering support, should the US jobs market demonstrate its resilience once more, while adding upside risks to the inflation and Fed rate outlooks," said Han Tan, chief market analyst at Bybit.
