Gold was on ?track for its biggest ?weekly loss in six ?on Friday, as escalating U.S.-Iran clashes lifted oil prices, adding to inflationary pressures and strengthening the case for higher U.S. interest rates.
Spot gold was up 0.6% at $3,995.41 per ?ounce, having touched its lowest since July ?1 earlier in the day. U.S. gold futures for August delivery gained 0.2% to $3,999.70.
The metal has lost 3% so far this week, its largest decline since June 1, with the Middle East ?conflict outweighing support from softer June U.S. inflation figures released this week.
The surge in oil prices risks ?reigniting inflation worries and increasing the likelihood of interest rate hikes. Non-yielding gold typically struggles in a high-interest-rate environment, as investors gravitate towards assets offering higher returns.
Dallas Federal Reserve President Lorie Logan ?became the first of Fed Chairman Kevin Warsh’s new colleagues to call publicly for ?a rate hike.
Fed Vice Chair Philip Jefferson also suggested ?he would be open to raising rates if there is no near-term improvement in inflation.
Traders are pricing in a 73% chance of ?a rate hike in December.
Gold discounts in India widened to a one-month high this week as hopes of lower prices kept buyers on the sidelines, while premiums in China were largely steady.
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