Rising oil prices and stronger PPI reinforce expectations of a Federal Reserve rate hike, putting pressure on gold prices.

The gold market remains volatile, as oil prices soar and the latest US PPI report reinforces expectations of a Federal Reserve rate hike next week. Gold traded near $4,330 on Friday, after falling 1.8% in the previous session. Gold may see a slight rebound after posting declines for three consecutive weeks. As fighting intensifies in the Middle East, inflation pressures are building up. Data released on Thursday showed the US PPI index rose by 0.4% last month, marking the largest increase since May. Manav Modi, a commodities analyst at Motilal Oswal Financial Services, said these figures show price pressures resurfacing, partly driven by high energy costs, intensifying concerns that inflation may persist. Investors now turn their attention to the US CPI, due later today, for more policy clues ahead of the mid-September Federal Reserve meeting. The swaps market is currently pricing in about a 70% chance of a rate hike next week.