Gold prices fell in early Asian trading on Friday after losing more than 1% in the previous session. Continued high inflation in the United States has strengthened expectations that the Federal Reserve could raise interest rates again, putting further pressure on gold.
Spot gold dropped 0.4% to $4,006.06 an ounce, while US gold futures for December delivery fell 0.3% to $4,018.50.
Despite the recent decline, gold is still on track for a small weekly gain. However, it is close to recording losses for the second month in a row.
The pressure on gold followed a rise in US inflation in September, driven by higher gasoline and other commodity prices. This has increased expectations of a possible interest rate hike in December, with traders placing the chances of such a move at around 75%.
Higher interest rates generally make gold less attractive to investors because it does not generate interest or regular income.
Elsewhere in the precious metals market, silver fell 1% to $51.87 an ounce. Platinum remained steady at $1,488, while palladium dropped 0.5% to $1,000.75. All three metals were also heading toward weekly and monthly losses.