Gold Pulls Back to US$4,300 Range; Profit-Taking Weighs on Prices
Gold prices weakened for a second day as profit-taking began to stall a recovery previously driven by milder US inflation data. Bullion fell as much as 0.9% to near US$4,310 per troy ounce on Friday (Aug 14), following a 1.3% decline in the previous session.
Gold had previously touched a 10-week high after US inflation data indicated that price pressures were beginning to ease. Lower CPI and PPI figures signaled that the impact of the energy price surge linked to the Iran conflict was subsiding in July, thereby alleviating pressure on the Federal Reserve to raise interest rates more aggressively.
Although the prospect of no rate hikes is generally positive for gold, market participants began locking in profits following a strong rally over the past few days. Spot gold was down 0.5% at US$4,329.50 per troy ounce at 07:30 London time, while silver weakened 0.4% to US$64.26.
Money markets now estimate a roughly one-third probability that the Fed will raise interest rates in September. Ahead of next month's Fed meeting, investors are awaiting further labor market data and a speech by Fed Chair Kevin Warsh at the Jackson Hole symposium in late August.
Regarding market impact, gold may continue to consolidate around current levels as technical momentum appears overextended following the strong rebound. As long as prices hold above US$4,300, the potential for recovery remains. However, if bond yields stay high or Middle East tensions drive energy prices up again, XAU/USD could see renewed volatility. (asd)*
Source: Newsmaker.id
