Gold Bounces Friday But Can’t Escape Weekly Loss After Inflation Shock

Gold prices rose slightly on Friday, supported by a weaker US dollar, but are still heading for a 1.7% weekly decline.

The drop came after Thursday’s producer price data showed the biggest increase in three years, reducing expectations for a large Federal Reserve rate cut in September.

While consumer price data earlier in the week had briefly raised hopes for a bigger rate cut, the hotter producer prices and lower-than-expected jobless claims have traders scaling back those expectations. Gold typically benefits from lower interest rates since it doesn’t yield any income.