Gold is headed for a weekly loss, as traders scale back bets on a Federal Reserve interest rate cut next month following rising inflation.

Gold bullion traded near $3,335 an ounce, after ending the previous session 0.6% lower following a report showing US wholesale inflation rose in July at its highest pace in three years. Treasury yields and the dollar strengthened after the data, weighing on non-interest-bearing gold as it is priced in that currency.

Swap traders now see about a 90% chance the US central bank will cut interest rates in September, having fully priced in such a move earlier this week. Bullion typically benefits in a lower interest rate environment because it pays no interest.

The precious metal has gained more than a quarter this year, with most of that gain coming in the first four months. This is supported by rising geopolitical and trade tensions that have spurred safe-haven demand, while central bank buying has also supported its strength.

Last week, confusion over whether gold bullion would be subject to US tariffs drove a surge in the premium for futures contracts in New York over spot prices in London. President Donald Trump said on Monday that there would be no levies, narrowing the gap between the two markets, but formal clarification is still pending.

Spot gold was steady at $3,336.45 an ounce at 7:44 a.m. in Singapore, setting it on track for a 1.8% loss this week. The Bloomberg Dollar Spot Index was little changed. Silver was flat, while platinum and palladium edged lower. (alg)

Source: Bloomberg