Gold set for best week since January as inflation fears ebb
GLD•China buying and other precious metals also gain
China's central bank stepped up its gold purchases for a fifth straight month in July, adding the most bullion to its reserves since October 2023, official data showed on Friday.
Spot silver XAG= climbed 4.4% to $64.16, platinum XPT= rose 1.7% to $1,758.13 and palladium XPD= gained 0.7% to $1,380.50. All three metals were headed for weekly gains.
Gold heads for biggest weekly rise since January
Gold rose on Friday to be on track for its biggest weekly rise since January, as easing inflation worries tied to a Middle East peace deal lowered expectations of U.S. rate hikes, while investors awaited nonfarm payroll data.
Spot gold XAU= was up 2.1% at $4,326.59 per ounce by 1130 GMT, after hitting a seven-week high on Thursday. Prices have gained over 7% for the week so far.
U.S. gold futures GCcv1 rose 2% to $4,386.10.
Rate expectations, Iran comments and jobs data in focus
"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 an increase in U.S. interest rates in September, down from 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 set for a weekly loss, easing inflation concerns and reducing expectations of higher interest rates. While gold is seen as an inflation hedge, higher rates tend to hurt its appeal because it offers no yield. O/R
