Quick overview

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Gold was expected to decline by 1.5% this week, mainly because of a sharp drop at the start of the week when President Donald Trump stated that gold bars would not be subject to tariffs.

Nonetheless, gold rose slightly in London trade on Friday but on track for weekly losses as hopes for a significant Federal Reserve rate cut next month waned, and investors looked ahead to US-Russia talks later in the day. XAU/USD edged up 0.3% to $3,344.88 an ounce, and gold futures for December increased 0.2% to $3,391.17 per ounce

Gold prices were expected to decrease by 1.5% this week, largely because of a sharp decline at the beginning of the week when President Donald Trump said gold bars would not face tariffs. Gold fell 0.6 percent after the US producer price index for July surpassed expectations and tempered hopes for a major rate cut by the Federal Reserve next month. The case for a rate cut by the Fed at its September meeting was strengthened by the release of mild consumer inflation data earlier this week.

Although a September rate cut remains the most likely scenario according to markets, expectations for a half-point cut have decreased, and the chances of a quarter-point move have reduced following the PPI data. Bullion prices face downward pressure as higher-for-longer interest rates make interest-bearing assets more attractive.

The day’s main event was the summit between Russian President Vladimir Putin and President Trump in Anchorage, Alaska, on Friday. If Vladimir Putin obstructs efforts to achieve peace in Ukraine, President Donald Trump has threatened Russia with “severe consequences.”