Gold prices experienced a slight decline, trading at approximately $4,340 an ounce, following a third consecutive weekly drop. This downward movement is primarily attributed to recent US inflation data, which indicated a stronger-than-anticipated rise in underlying prices.
Data released on Friday showed that the core Consumer Price Index, which excludes volatile food and energy costs, increased by 0.3% month-over-month in August. This figure surpassed market expectations and has led to increased speculation that the Federal Reserve will raise interest rates at its upcoming meeting this week. Higher interest rates typically reduce the appeal of non-yielding assets like gold.
Despite a brief rebound at the end of last week, gold still finished down by 1.8% for the week. Analysts like Belinda Allen from Commonwealth Bank of Australia suggest that the robust inflation data solidifies the case for the Fed to tighten monetary policy, which generally weighs on gold's value.
