According to Khabaronline news agency, the price of gold rose slightly in the world market trading on Friday under the influence of the release of the US inflation statistics and the adjustment of speculations about further interest rate increases, but it suffered a sharp weekly decrease.
The price of gold per ounce for immediate delivery increased by 0.1% to $3,879 and 71 cents. The price of this precious metal briefly rose to its daily high of $3,922 and 97 cents after the release of the US producer price index data.
The price of gold per ounce in the US futures market for December delivery remained unchanged and closed at $3,886.30 cents.
Gold prices fell about 3 percent to their lowest level in more than a year on Thursday, as rising oil prices fueled concerns about higher inflation and higher interest rates. This price drop was exacerbated by the release of US consumer price index data early last week – which showed higher-than-expected figures.
The precious metal fell about 4.5 percent last week, posting its worst weekly performance since early June.
According to data released on Friday, the US producer price index for final demand rose 0.3 percent last month. Meanwhile, this index recorded a 1.4% growth in September, after revising the previous statistics. The Reuters poll also predicted a 0.4 percent increase in this index.
Gold has struggled to hold on to early price gains following the release of the producer price index as the bond market remains under pressure and the Federal Reserve’s contractionary stance, independent metals trader Tai Wang said.
He added: Unlike last month, the producer price index statistics were not surprising and higher than expected, but the monthly increase of 0.3% in the producer price index is still too high for monetary policy makers.
Wang added: “It has been a difficult week for gold, and due to the strict stance of the Federal Reserve officials, the precious metal may struggle to return to the $4,000 level.”
According to Reuters, according to CME’s Fed Watch tool, markets see a 91.4 percent chance of a 25 basis point interest rate hike in December, up from 96.2 percent before the PMI data was released. Also, they reduced the probability of an increase of 50 basis points from 13.8% before the publication of this statistic to 8.6%.
While gold is commonly seen as a hedge against inflation, in a high interest rate environment, it loses its appeal as a zero-yield asset.
In the market of other precious metals, each ounce of silver decreased by 1.9% to 49 dollars and five cents, and each ounce of platinum decreased by 1.9% to 1490 dollars and 6 cents. Palladium rose 1.1% to $1,004 and 40 cents per ounce. All three metals had weekly losses.
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