Gold ticked higher on Friday, reversing earlier losses as oil retreated ?below the $100 U.S. per barrel ?mark, with investors monitoring ?developments in the Middle East for fresh cues on energy-driven inflationary risks and the outlook for U.S. interest rates.
Spot gold rose 0.2% to $4,055.38 per ounce, after ?dropping ?2% on Thursday to $4,047.26, while U.S gold futures ?for August delivery for August delivery gained 0.2% to $4,058.10.
Brent crude rose more than 7% on Thursday, breaking through $100 a barrel for the first time since May after U.S President Donald Trump promised “major military punishment” ?for Iran and its Houthi allies, after Yemeni fighters struck two Saudi oil tankers in the ?Red Sea.
Investors are now eyeing the U.S. Federal Reserve’s policy meeting next week, ?when it is largely expected to keep rates unchanged.
Still, traders ?are pricing in about a 78% chance of a rate-hike in September. The European Central Bank kept ?interest rates unchanged as expected on Thursday ?but held the door open to another increase in September.
Elsewhere, India’s gold discounts widened to their highest level in seven weeks as demand remained subdued after a price rebound earlier in the week deterred buyers, while top consumer China saw an improvement in ?buying interest.
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