Gold prices edged higher on Friday, buoyed by a weaker dollar, but were poised for a weekly decline after hotter-than-expected U.S. inflation data dampened prospects for a super-sized September rate cut by the Federal Reserve.

Goldman Sachs economists in a note estimated that consumers could soon bear up to 67% of tariff costs, up from 22%, thus escalating broader inflation risk. Before the Aug. 14 PPI report, markets were nearly unanimous in pricing a September Fed interest rate cut of up to 0.50%.

With the job market faltering and consumer prices not surging as expected, investors increasingly believe the Federal Reserve is about to cut interest rates to boost the economy.