Gold prices fell on Friday, but are still on track to post a third straight week of gains as weaker-than-expected U.S. inflation data boosted hopes of a September rate cut by the Federal Reserve. Thursday's data showed that U.S. consumer prices unexpectedly fell, with the smallest year-on-year increase in a year, bringing the Fed one step closer to a rate cut. Tim Waterer, chief market analyst at KCM Trade, said the inflation outlook and interest rate situation are favorable for gold this week. As we get closer to a low-interest rate environment, conditions may be ripe for gold to hit new highs before the end of the year. Investors are currently focusing on the U.S. PPI data to be released tonight.