Gold Holds Weekly Drop on Growing Concern Over US Inflation
Gold held a weekly decline on signs President Donald Trump’s tariff agenda is starting to create inflationary pressures in the US, and could threaten rate cuts.
Bullion traded around $3,340 an ounce following a 1.8% weekly drop. Data last week showed US wholesale inflation accelerated in July by the most in three years, prompting traders to trim bets on a Federal Reserve rate cut next month. Higher borrowing costs are negative for non-interest paying gold.
Raphael Bostic, the President of the Atlanta Fed, said after a three-day tour of the southeastern US that tariff strains are real and high borrowing costs are squeezing business profits. Markets still see as many as two cuts this year.
Traders will be looking for any progress from Trump’s meeting with Ukraine President Volodymyr Zelenskiy, designed to set out terms for a potential peace deal he discussed with Putin at last Friday’s meeting in Alaska. A lasting cease-fire — or an ongoing conflict — could influence demand for gold.
Bullion has been consolidating in a range not so far below the $3,500 an ounce record high it reached in April. The metal is still up by more than a quarter this year, as rising geopolitical tensions, concerns over the strength of the global economy, and diversification from dollar assets have supported the haven.
Gold was down 0.1% to $3,340.08 an ounce as of 8:35 a.m. Singapore time. The Bloomberg Dollar Spot Index was steady. Silver and platinum were little changed, while palladium rose.
Source: Bloomberg
