Rate hike bets keep gold on track for its worst week in four months
GLD•Gold was down more than 4% for the week, its steepest weekly decline since early June, as expectations of further Federal Reserve tightening weighed on bullion. US PPI rose 0.3% last month, below the 0.4% increase forecast in a poll.
1. Gold firms after PPI
Spot gold rose 0.6% to $3,898.84 per ounce on Friday after US producer prices increased 0.3% last month, below the 0.4% rise forecast in a poll. Gold remained on track for a weekly decline after falling 3% on Thursday to a more-than-one-year low.
2. Rate expectations weigh
Markets saw an 89.4% chance of a 25-basis-point US rate hike in December after the PPI data, down from 96.2% beforehand. The chance of a 50-basis-point move was 10.6%, compared with 13.8% before the data. Higher interest rates tend to diminish the appeal of non-yielding gold.
3. Other metals decline
Silver and platinum fell 0.2% and 0.4%, respectively, while palladium rose 2.1%. All three metals were on course for weekly declines.
