Gold Edges Higher As Oil Prices Ease After Recent Surge
(RTTNews) - Gold edged higher on Friday as oil prices slipped from recent highs and investors awaited key U.S. CPI data later in the day for additional clues on the Federal Reserve's rate trajectory.
Spot gold rose 0.6 percent to $4,343.32 an ounce after hitting a one-week low earlier. U.S. gold futures were down half a percent at $4,384.75 an ounce.
Brent crude futures fell more than 3 percent toward $104 a barrel after the International Energy Agency (IEA) cut its forecast for oil demand this year and reports suggested that Iran and Oman were meeting with Gulf states to reopen shipping through the Strait of Hormuz.
The Financial Times reported that Gulf foreign ministers plan to meet their Iranian counterpart in the Omani coastal city of Salalah this coming Monday to secure a deal to manage commercial shipping through Hormuz.
The U.S. dollar held gains after the latest U.S. Producer Price Index (PPI) data indicated that wholesale inflationary pressures are picking up again.
All eyes now turn to the U.S. consumer price index reading for August later in the day, with economists projecting headline inflation at 0.4 percent month-on-month and 3.4 percent year-on-year.
The CPI data will be a key input for the Federal Reserve's September 16 interest-rate decision. The odds of a rate hike next week currently stand at 70 percent.
Elsewhere in Europe, traders are bracing for interest rate hikes well into next year.
The outlook remains highly uncertain, with risks tilted upward for inflation and downward for growth, European Central Bank (ECB) President Chritine Lagarde warned Thursday after raising three key interest rates by 25 basis points.
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