Gold was on track for a third weekly decline as surging oil prices and the latest US inflation report bolstered the case for the Federal Reserve to hike interest rates next week. Bullion was little changed near $4,315 an ounce on Friday, after dropping 1.8% in the previous session to the lowest since early August. The US producer price index rose 0.4% last month, the most since May, according to data released Thursday.

That reflected growing pressure from higher energy prices as fighting escalates in the Middle East. Benchmark Brent crude pushed higher, close to $108 a barrel, with Iran and the US digging in for a protracted war. Hostilities have intensified in recent weeks, with the US striking Iranian oil tankers, the Islamic Republic firing missiles at a Jordanian airbase and Tehran-backed Houthis in Yemen attacking Saudi Arabian infrastructure.

Bond yields also surged after lower-than-expected purchases by the US Treasury Department during its first expanded buyback operation. That raised doubts about the effectiveness of Treasury Secretary Scott Bessent’s unusual intervention aimed at stabilizing the market and curbing the jump in long-term yields. Gold — which doesn’t pay interest — tends to perform worse when yields are high.

Investors will now be keeping tabs on the US consumer price index due later Friday for further clues to Fed policy ahead of the central bank’s Sept. 14-15 meeting. Swaps traders are currently pricing in a roughly 70% chance of a rate hike. Spot gold slipped 0.1% to $4,312.20 an ounce at 7:55 a.m. in Singapore, on track for a weekly decline of 2.7%.

Silver fell 0.3% to $63.40 an ounce, after dropping 5.5% on Thursday — the most since June. Platinum and palladium also retreated. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat, after rising 0.3% in the previous session.