Gold prices remained close to a one-week low on Friday, influenced by heightened expectations of a U.S. rate hike, while focus shifted to the U.S. consumer price index data scheduled for release later in the day. Spot gold remained relatively stable at $4,318.88 per ounce, as of 0020, following a decline to its lowest level since September 2 earlier in the day. Prices declined by almost 2% on Thursday following the anticipated rise in U.S. producer prices for August. U.S. gold futures for December delivery experienced a decline of 1.1%, settling at $4,359.50. The Federal Reserve appears increasingly inclined to elevate short-term borrowing costs at its forthcoming meeting, as traders speculated on Thursday following the initial key inflation report of the week.

The Producer Price Index for final demand increased by 0.4% last month, following an upwardly revised gain of 0.1% in July, according to the Labour Department’s Bureau of Labour Statistics. The U.S. consumer price index data is scheduled for release at 1230. In the meantime, expectations on further policy tightening as early as October were fuelled by the European Central Bank’s second rate increase of the year in an effort to curb an increase in inflation driven by energy and a warning that pricing pressures might prove to be persistent. Despite gold’s reputation as an inflation hedge, increasing interest rates frequently exert pressure on the metal, which does not provide any yield.

Iran-aligned Houthis took control of Yemen’s port city of Mocha on Thursday and progressed along the Red Sea coast to key islands, according to military sources. This development occurred just hours after President Donald Trump expressed his expectation that the Iran war would conclude following the U.S. midterm elections. Among other metals, spot silver declined by 0.1% to $63.48, platinum remained stable at $1,777.42, and palladium decreased by 0.2% to $1,279.25.