Gold heads for weekly gains, supported by interest rate cut bets

Gold prices fell today, Friday, but were heading for gains for the third week in a row, as weaker-than-expected US inflation data raised hopes that the Federal Reserve (the US central bank) would cut interest rates in September.

Gold fell in instant transactions by 0.2% to $2,409.19 per ounce by 0421 GMT, after rising 2% yesterday, Thursday.

US gold futures also fell 0.3% to $2,414.10, according to Reuters.

Data published yesterday, Thursday, showed that consumer prices in the United States fell unexpectedly, and that the annual increase was the smallest in a year, which reinforces expectations of lowering interest rates.

“Inflation expectations and interest rate prospects moved in favor of gold this week,” said Tim Waterer, chief market analyst at KCM Trade. As we approach a lower interest rate environment, conditions may be ripe for gold to reach new record highs before the end of the year.”