WASHINGTON (dpa-AFX) - Gold prices moved higher on Friday, hitting record highs, as the dollar fell amid optimism the Federal Reserve will start reducing interest rates, starting next week.
Recent inflation has partly offset optimism the Fed will lower rates more aggressively, but the central bank is still expected to continue cutting rates over the next several months.
Gold prices were also supported by former New York Fed President Bill Dudley's comments on Wednesday that that there was a strong case for a 50 basis point reduction.
The dollar index, which fell to 100.88 in the New York session, recovered to 101.08, but still remained nearly 0.3% down from the previous close.
Gold futures for September ended higher by $30.10 or about 1.18% at $2,581.30 an ounce. Gold futures gained 3.52% in the week, snapping a two-week losing streak.
Silver futures for September settled at $30.699 an ounce, gaining $0.956 or about 3.2%, and moving for a third straight session. Silver futures gained nearly 10.5% in the week.
Copper futures for September climbed to $4.1600 per pound, gaining $0.0270 or 0.65%.
While the headline PPI showed a deeper-than-expected slowdown, core PPI remained sticky, sending mixed signals about the state of the world's largest economy.
The FOMC meeting on September 17-18 is crucial for financial markets, with expectations leaning toward a 25-bps rate cut followed by a series of interest rate cuts before the end of the year.
CME Group's FedWatch Tool currently suggests rates will be lower by at least a full percentage point following the Fed's December meeting.
Data on import and export prices along with a report on consumer sentiment are likely to garner investor attention ahead of next week's Fed meeting.
The consumer survey report includes readings on inflation expectations.
In economic news today, the University of Michigan said its consumer sentiment index rose to 69.0 in September from 67.9 in August, while economists had expected the index to inch up to 68.0.
The report also showed a continued decrease by year-ahead inflation expectations, which fell for the fourth consecutive month.
Year-ahead inflation expectations edged down to 2.7% in September from 2.8% in August, hitting the lowest level since December 2020.
The Labor Department also released a report before the start of trading showing import prices in the U.S. decreased by slightly more than expected in the month of August.
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