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Investing.com-- Gold prices edged higher Friday, but were still heading for weekly losses given reduced hopes for an outsized Federal Reserve rate cut next month.
At 04:55 ET (08:55 GMT), Spot gold edged 0.2% higher to $3,341.70 an ounce and Gold Futures for December gained 0.1% to $3,387.80/oz.
Fed cut expectations hit
Gold prices were poised to lose 1.5% this week, mainly due to a sharp decline at the start of the week when President Donald Trump said gold bars would not face tariffs, but also after the U.S. producer price index for July came in hotter-than-expected and dampened expectations of a large Federal Reserve rate cut next month.
Mild consumer inflation data released earlier this week had strengthened the case for the Fed to cut rates at its September meeting, potentially by a hefty 50 basis points.
But this optimism was dulled on Thursday by the release of the hot PPI number, which suggested that the Trump administration’s sweeping tariffs were resulting in elevated inflation working through the system.
Markets still view a September rate cut as the most likely outcome, but the chances of a quarter-point move slipped from near certainty after the PPI data, while expectations for a half-point cut diminished.
Higher-for-longer rates put downward pressure on bullion prices as they make interest-bearing assets more attractive.
Trump-Putin meet ahead
Away from the economic outlook, the focus for the day was squarely on Friday’s summit between U.S. President Donald Trump and Russian President Vladimir Putin in Anchorage, Alaska.
Trump has warned of “severe consequences” for Russia if Vladimir Putin blocks progress toward peace in Ukraine.
A constructive outcome could reduce demand for gold as a safe-haven asset, although any signs of failed negotiations or heightened tensions could boost bullion prices.
Other precious metals were also subdued on Friday, with Platinum Futures edging up 0.7% to $1,370.30/oz. Silver Futures were down just 0.1% to $38.035/oz.
Benchmark Copper Futures on the London Metal Exchange rose 0.2% to $9,787.00 a ton, while U.S. Copper Futures also traded 0.3% higher to $4.4930 a pound.
Ayushman Ojha contributed to this article