Gold prices advanced on Friday and remained on track for a weekly gain, supported by a weaker US Dollar after a series of US inflation data this week strengthened expectations that the Federal Reserve will keep interest rates unchanged at its September meeting.

Spot gold rose around 0.7% to US$4,379.95 per troy ounce. In the previous session, prices fell 1.3% on profit-taking after touching their highest level since June 5. Gold was still up around 0.9% for the week, while US gold futures settled 0.4% higher at US$4,437.30.

The weaker US Dollar provided additional support for the precious metal. The Dollar Index slipped around 0.3%, making dollar-denominated gold relatively cheaper for buyers using other currencies and helping revive buying interest following the previous session’s correction.

Gold was also supported by signs

Gold was also supported by signs of weakness in the US labor market. July Nonfarm Payrolls unexpectedly declined, while inflation data released this week were broadly in line with market expectations. The combination has significantly reduced pressure on the Fed to tighten monetary policy further.

Markets are now increasingly expecting the Fed to keep its benchmark interest rate unchanged within the 3.50%–3.75% range in September. According to the CME FedWatch Tool, the probability of a rate hike next month has fallen to around 33%, down from approximately 55% a week earlier.(mrv)

Source : Newsmaker.id