London — Gold edged higher on Friday, lifted by a weaker dollar, but gains were tempered by the expectation of a US rate hike in September. The dollar index slipped to a one-and-a-half-month low on Friday after weaker than expected US inflation data and a recovery in emerging markets. Spot gold was up 0.4% at $1,206.01/oz by 10am GMT, having hit its highest since August 28 at $1,212.65 on Thursday. It has risen 0.9% so far this week, on track for its first weekly gain in three. US gold futures were up 0.3% at $1,211.70/oz. "We’ve seen quite a bit of weakness in the dollar which has supported gold, but we’re not out of the woods yet," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. "The fact that gains weren’t stronger has still got to do with gold’s focus on the Chinese renminbi, which remains a bit challenged, but also that the market is starting to look forward to the next US rate hike." Gold has shown a close correlation to the currency of China, the bigge...
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