FX.co ★ Gold Heads for Second Straight Weekly Decline as Rate Hike Fears Bite

Gold fell to $4,500 per ounce on Friday, heading for a second straight weekly loss, as elevated oil prices stoked inflation concerns and strengthened expectations of a US interest rate hike this year. Crude traded near four-year highs, with investors wary about the likelihood of a breakthrough in US-Iran peace talks. Iranian media reported that Iran’s foreign minister met with Pakistan’s interior minister on Friday to discuss proposals to end the war, while US Secretary of State Marco Rubio cited "slight progress" in mediated negotiations but cautioned that Washington and Tehran were "not there yet" on a peace agreement. The protracted conflict and rising inflation pressures prompted markets to price in a Federal Reserve rate increase before year-end, assigning roughly a 55% probability to at least one 25-basis-point hike by October. Reinforcing this outlook, Fed Governor Christopher Waller indicated he no longer believed the central bank should retain an easing bias in its policy statement.