Gold Makes First Weekly Gain To Stop 3-Week Bleeding

Gold posted its first gain in four weeks as the dollar retreated further from its biggest rise in two decades on Friday, allowing bullion to cement its safe-haven status.

On the New York Comex, the benchmark gold contract for December delivery rose $8.40, or 0.8%, to settle at $1,728.60 an ounce. It gained 0.3% on the week after a cumulative loss of 5.2% over the previous three weeks. The Dollar Index, which is benchmarked against six major currencies led by the euro, fell for a third straight day to 108.35 from Wednesday's 20-year high of 110.79. The dollar fell despite Federal Reserve officials on Friday pushing for another big rate hike at the central bank's meeting on September 21 to keep inflation low. "Gold is rising as the historic rise in the dollar seems to have run out of steam," said Ed Moya, an analyst at online trading platform OANDA. "It looks like Wall Street is getting used to the idea of another 75 basis point rate hike from the Fed." Fed Governor Chris Waller said on Friday that the U.S. needs another "significant" rate hike this month to get inflation under control, with James Bullard, one of his most hawkish colleagues, suggesting a third 75 basis point hike. The Fed has raised rates 225 basis points four times since March, with two back-to-back 75 basis point hikes in June and July. Prices in the US have been hovering at decade highs since late last year, with the closely watched Consumer Price Index (CPI) falling to 8.5% in July from a peak of 9.1% in June. The next CPI data for August will be released on September 13. The Fed's inflation target is just 2% a year and it has pledged to raise interest rates as much as necessary to reach that target. "The fate of gold could be decided after the next inflation report," Moya said. "If consumer prices come in higher than expected, gold could see selling pressure targeting the $1,680 region. A sharp slowdown in price pressures could only provide modest upside for gold." On the other hand, Moya said that gold could gain more acceptance as a safe haven if the dollar declines further. "Gold is finding a home above the $1700 level and this could continue if investors continue to look beyond hawkish central bank speeches." Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!