Gold prices fell on Friday as investors locked in profits after non-yielding bullion climbed to an over two-month high in the previous session, with mild U.S. inflation data undermining expectations of a September Federal Reserve rate hike.FUNDAMENTALSSpot gold was down 0.5% at $4,330.37 per ounce, as of 0103 GMT, while U.S. gold futures for December delivery slid 0.8% to $4,386.80.Bullion climbed to its highest point since June 5 on Thursday, before settling 1.3% lower and wiping out its gains for the week.U.S. producer prices were unchanged in July as goods prices fell and the cost of services increased marginally, bolstering market expectations that the Fed could keep interest rates unchanged next month.The report from the U.S. Labor Department on Thursday followed news of mild consumer inflation last month.Cleveland Fed President Beth Hammack reiterated her view that the U.S. central bank should raise rates immediately to restrain growth and too-high inflation.On the geopolitical front, Washington on Thursday threatened to maintain a naval blockade of Iran indefinitely, ratcheting up economic pressure on Tehran as ceasefire talks have floundered.Highlighting persistent demand for the metal, gold is on the rise again, as a confluence of economic and political dynamics spurs demand from investors around the world, especially one cohort: central banks.Underscoring robust central bank interest in gold, the Bank of Korea bought and held 679,765 shares of SPDR Gold Trust, valued at roughly $250.4 million as of end-June, a U.S. SEC filing showed, marking its first disclosed gold investment since buying physical gold in 2013.Venezuelan authorities plan to focus on reconstruction efforts and recovering gold reserves worth an estimated $4 billion held in the Bank of England's underground vaults, National Assembly chief Jorge Rodriguez said on Wednesday, as monthly inflation surged to 20%.In other metals, spot silver slipped 0.8% to $63.92 per ounce.Platinum decreased 1% to $1,700.60, while palladium eased 0.3% to $1,303.25, both at their lowest levels since August 4.DATA/EVENTS (GMT)0900 EU Total Trade Balance SA June0900 EU GDP Flash Estimate QQ, YY Q21230 US Retail Sales MM July1400 US U Mich Sentiment Prelim August
Gold retreats from two-month high after inflation-driven rally
Gold prices experienced a dip on Friday, retreating from a recently established two-month peak, driven by mild U.S. inflation figures that tempered expectations for a September Federal Reserve rate hike. Nonetheless, central banks exhibit persistent enthusiasm for gold, bolstering its market stability. Price drops were observed across other precious metals, including silver, platinum, and palladium, as investors await critical economic data releases from the EU and the U.S.
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