Gold holds weekly drop on growing concern over US inflation

Gold held a weekly decline on signs that US President Donald Trump’s tariff agenda is starting to create inflationary pressures in the US, and could threaten rate cuts.

Bullion traded around $3,340 an ounce following a 1.8% weekly drop. Data last week showed US wholesale inflation accelerated in July by the most in three years, prompting traders to trim bets on a Federal Reserve rate cut next month. Higher borrowing costs are negative for non-interest-paying gold.

Raphael Bostic, the President of the Atlanta Fed, said after a three-day tour of the southeastern US that tariff strains are real and high borrowing costs are squeezing business profits. Markets still see as many as two cuts this year.

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Traders will be looking for any progress from Trump’s meeting with Ukraine President Volodymyr Zelenskyy, designed to set out terms for a potential peace deal he discussed with Putin at last Friday’s meeting in Alaska. A lasting cease-fire - or an ongoing conflict - could influence demand for gold.

Bullion has been consolidating in a range not so far below the $3,500 an ounce record high it reached in April. The metal is still up by more than a quarter this year, as rising geopolitical tensions, concerns over the strength of the global economy, and diversification from dollar assets have supported the haven.

Gold was down 0.1% to $3,340.08 an ounce as of 8:35 am Singapore time. The Bloomberg Dollar Spot Index was steady. Silver and platinum were little changed, while palladium rose.