Gold prices rose in the European market on Friday, moving into positive territory, supported by the current decline in US dollar levels. However, they remain on track to post a weekly loss, as stronger-than-expected US producer price data reduced the likelihood of a large 50-basis-point interest rate cut by the Federal Reserve in September.

To reprice the existing expectations around a US interest rate cut, investors are awaiting the release later today of key US economic data on monthly retail sales and confidence levels in the world’s largest economy.

Price Overview

• Gold prices today: Gold rose by 0.4% to $3,348.77, from the opening level at $3,335.33, with the lowest price recorded at $3,332.33.

• At Thursday’s settlement, gold prices fell by 0.65%, marking their first loss in three days, due to the dollar’s rebound following strong US producer price data.

Weekly Performance

Over the course of this week, which officially ends at today’s settlement, gold prices are down about 1.5%, on track for their first weekly loss in three weeks amid slowing demand for the metal as a safe haven.

US Dollar

The US dollar index fell by 0.3% on Friday, resuming losses that paused temporarily yesterday and moving once again toward a two-week low, reflecting the decline in the US currency against a basket of major and minor peers.

US Interest Rates

• US producer prices in July recorded the fastest rise in three years, driven by a sharp increase in goods and services costs due to tariffs.

• Following the data, and according to the CME Group’s FedWatch tool, the pricing for a 25-basis-point cut in September fell from 99% to 92%, while the probability of keeping rates unchanged rose from 1% to 8%.

• The pricing for a 25-basis-point cut in October slipped from 99% to 93%, while the probability of no change rose from 1% to 7%.

• All expectations for a 50-basis-point cut in either September or October have completely faded.

• St. Louis Fed President Alberto Musalem stated that a half-point rate cut in September is unjustified, a day after Treasury Secretary Scott Bessent suggested it could be possible.

Important Data

To reassess the above US interest rate expectations, investors are watching for the release later today of US economic data on July retail sales, as well as the University of Michigan’s August confidence and inflation expectations indexes.

Gold Outlook

• Tim Waterer, chief market analyst at KCM Trade, said gold is still dealing with the fallout from the higher producer price index, which raised questions about the Fed’s willingness to cut rates this year.

• Waterer added that if the wholesale price rise becomes a trend that translates into higher consumer prices, expectations for US interest rate cuts may weaken, potentially capping gold’s upside from a yield perspective.

SPDR Fund

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell yesterday by 2.86 metric tons to 961.36 metric tons, down from 964.22 metric tons, which was the highest level since September 12, 2022.

The British pound rose on Friday against a basket of global currencies, resuming the gains that had paused yesterday against the U.S. dollar, on its way toward touching its highest level in five weeks again, and on the verge of achieving a second consecutive weekly gain.

The sterling’s strong performance this week comes thanks to the release of a series of strong economic data in the United Kingdom, especially those related to gross domestic product, which showed that the British economy grew better than expected during the second quarter of this year.

These data indicate continued pressure on monetary policymakers at the Bank of England, which led to a decline in expectations for a 25-basis-point cut in British interest rates in September.

Price outlook

• Pound exchange rate today: The pound rose against the dollar by 0.15% to $1.3551, from the opening price of $1.3533, and recorded the lowest level at $1.3526.

• On Thursday, the pound lost 0.35% against the dollar, in its first loss in the past three days, after having earlier in the session recorded a five-week high at $1.3595.

• Apart from correction and profit-taking, the pound declined in parallel with most major and minor currencies, following the release of strong U.S. producer price data.

Weekly trading

Over the course of this week, which officially ends with today’s settlement, the pound is up so far by 0.75% against the U.S. dollar, on the verge of achieving a second consecutive weekly gain.

UK economy

Data released in London on Thursday showed that the British economy grew by 0.3% in the second quarter, surpassing market expectations of 0.1% growth, after recording 0.7% growth in the first quarter.

On a monthly basis, the British economy grew by 0.4% in June, better than market expectations of 0.2% growth, after stagnating at -0.1% in May.

The British economy is expected to make further progress in the coming quarters, supported by a potential improvement in economic indicators and stable financial conditions, especially after the UK government reached a major trade agreement with the United States, which is expected to boost exports and stimulate foreign investment.

UK interest rates

• Following the above data, pricing of the likelihood of the Bank of England cutting British interest rates by 25 basis points at its September meeting fell from 30% to below 20%.

• After a hawkish Bank of England meeting last week, traders reduced their bets on BoE easing and anticipated additional cuts of 17 basis points this year.

The Japanese yen rose in Asian trading on Friday against a basket of major and minor currencies, resuming gains that had briefly paused yesterday against the US dollar, moving again toward a three-week high. The rise came after stronger-than-expected data on Japan’s economic growth — the world’s fourth-largest economy.

The data boosted expectations that the Bank of Japan could raise interest rates by 25 basis points in September, pending more upcoming releases on inflation, wages, and unemployment.

Price Action

USD/JPY fell about 0.4% to ¥147.20 from today’s opening at ¥147.75, after hitting a session high of ¥147.87.

On Thursday, the yen ended down 0.25% against the dollar, its first decline in three days, after earlier touching a three-week high at ¥146.21.

Aside from profit-taking, yen levels weakened alongside most other major and minor currencies after strong US Producer Price Index data.

Japanese Economy

Preliminary GDP figures showed Japan’s economy grew 0.3% in Q2 2025, above market forecasts of 0.1% growth. The economy posted flat growth (0.0%) in Q1.

The stronger-than-expected GDP reading came despite Japan’s struggle with an unstable trade environment in Q2, with a trade deal with the US only reached on July 23. Under this deal, Japan faces a blanket 15% tariff on all exports to the US, including cars.

Interest Rate Outlook

Following the GDP data, market pricing for a September BoJ rate hike of 25 basis points rose from 38% to 45%.

Investors await more data on inflation, unemployment, and wages to refine those expectations.

Minutes from the BoJ’s June policy meeting showed some board members would consider resuming rate hikes if trade tensions eased.

Ethereum prices fell alongside most other cryptocurrencies during Thursday’s trading, as risk appetite weakened following higher-than-expected US inflation data that reduced the likelihood of a Federal Reserve rate cut.

Government data showed that the US Producer Price Index rose 0.9% month-on-month in July, well above analysts’ expectations of 0.2%.

Initial jobless claims fell by 3,000 to 224,000 in the week ending August 9, compared to forecasts for a rise to 228,000. This was the first decline in three weeks, signaling ongoing labor market resilience.

Earlier this week, similar US data showed that annual consumer price inflation remained steady at 2.7% in July, below expectations for an increase to 2.8%.

Core inflation — which excludes volatile food and energy prices — rose to 3.1% in July, above forecasts for a 3% reading and compared with 2.9% in June.

According to the FedWatch tool, investors see a 99% probability of a 25 basis point Fed rate cut in September, compared with 94% yesterday and 57% a month ago. Analysts also estimate a 61% probability of another 25 basis point cut in October (up from 34% a month ago), and a 51% probability of a similar cut in December (up from 25% a month ago).

Separately, US Treasury Secretary Scott Bessent said that the administration of President Donald Trump has no plans to purchase cryptocurrencies or include them in official reserves at this time. He explained that the priority remains managing financial assets and seizures in a way that ensures economic stability and protects against market volatility.

Bessent added that dealing with cryptocurrencies requires clear regulatory policies and a solid legislative framework that balances support for digital sector innovation with safeguarding the financial system from potential risks.

Ethereum

As for trading, Ethereum dropped 4.5% to $4,518.2 on CoinMarketCap at 21:46 GMT.