Gold Retreats from Two-Month High, Set for Weekly Loss

Gold prices fell on Friday, on track to post a weekly loss, as investors took profits after the precious metal surged to its highest level in more than two months following a decline in bets on further U.S. interest rate hikes.

Ole Hansen, an analyst at Saxo Bank, said, “Gold is declining for the second day as investors move to take profits after a strong rally, while markets appear to have absorbed moderate U.S. inflation data and have largely scaled back expectations for rate hikes.”

He added, “Following last week’s breakout, gold is now trading in a range between $4,200 and $4,500, with the latter level representing the 200-day moving average, a key indicator for medium- and long-term investors.”

Gold rose yesterday, Thursday, to its highest level since June 5.

U.S. producer prices remained unchanged in July after June data were revised to show a 0.1% decline, while consumer prices rose slightly last month as gasoline costs fell for a second consecutive month.

According to CME Group’s FedWatch tool, traders now see a 33% probability of a rate hike in September, down from around 44% last week.

Meanwhile, oil prices rose after Washington threatened to maintain an indefinite naval blockade on Iran, stoking concerns about supply disruptions. In other precious metals, silver rose 0.3% in spot trading to $64.67 per ounce.