Gold eased after a warmer US inflation reading raised the likelihood of a Federal Reserve rate increase this week. The core consumer price index, which strips out food and energy, climbed 0.3% in August from the prior month.
That has traders assigning about an 88% probability to a September move, setting the stage for what would be the first hike in three years. Higher rates usually undercut gold because the metal offers no yield.
Bullion hovered around $4,340 per ounce following a third consecutive weekly decline. It closed Friday higher but still ended the week down 1.8%.
At 8:30 a.m. in Singapore, spot gold slipped 0.2% to $4,339.96. Technicians note prices are circling the 100-day moving average.
Prices have mostly stayed near $4,400 since bouncing off a base around $4,000 in July, as traders keep reworking their Fed outlooks. The Bloomberg Dollar Spot Index edged up slightly.
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With conflict in the Middle East still intensifying, oil kept climbing, adding to inflation pressure. Brent advanced toward the $107 mark per barrel following an almost 9% jump last week.
Plans for a Monday meeting between Iran and several Gulf nations aimed at setting up a temporary shipping route through the Strait of Hormuz were put on hold, stalling efforts to boost traffic through the vital chokepoint. Meanwhile, tighter Fed policy could invite blowback from President Donald Trump, who on Sunday repeated his push for lower rates after weeks of public frustration with the central bank's stance.
Silver slipped 0.8%, to $64 an ounce, while platinum and palladium also declined.
Gold is getting tugged by rates, oil, and the dollar all at once. Even with near-term headwinds, plenty of investors still see it grinding higher as its old-school hedge role comes back into favor. For now, the Fed's next move and energy prices are the big variables for where this fits in your plan.
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