Gold prices traded around 3,340 per ounce on Friday, heading for its worst week since late June, as hotter-than-expected US data tempered hopes for a large Fed rate cut. US producer prices in July rose at its fastest pace in three years, well above forecasts, signaling that companies are passing higher import costs from tariffs onto consumers. Traders are now leaning toward a 25-basis-point rate cut next month, followed by another in October, reflecting Fed’s Mary Daly’s comments opposing a 50-basis-point cut in September. Investor focus is shifting to whether Fed Chair Jerome Powell will provide new guidance on monetary policy at the central bank’s annual economic symposium in Jackson Hole, Wyoming, next week. On the geopolitical front, expectations remain cautious that Friday’s summit between Donald Trump and Vladimir Putin will produce a major breakthrough on Ukraine war
The Indian rupee weakened to 87.7 per USD, remaining close to the record low of 88.1 on August 5th amid steeper US tariffs on India and the outlook of a dovish RBI. US President Trump announced a new tariff of 25% on Indian imports due to the country's continued buying and re-exporting of Russian oil. This was after PM Modi pushed back and stated that Indian firms buy the most favorable energy in an uncertain economic backdrop. The tariffs double the rate of the 25% imposed last week in the US's latest round of reciprocal tariffs, hurting the outlook of foreign exchange inflows into the world's fastest growing major economy. On the policy front, consumer inflation fell to 1.55%, well below market expectations, to surpass the lower bound of the RBI's inflation tolerance band of 2% for only the third occasion since adopting the target in 2016. The central bank held rates unchanged in its August meeting but a majority of the market has positioned itself for another rate cut this year
