Gold Heads For Second Straight Weekly Loss
Gold edged lower on Friday and was on track for a second consecutive weekly loss as a stronger US dollar and firm oil prices reinforced expectations that the US Federal Reserve may keep interest rates elevated for longer.
Spot gold fell 0.4% to $4,522.89 per ounce at 0222 GMT, leaving it down about 0.3% for the week. US gold futures for June delivery also slipped 0.4% to $4,524.40.
The dollar held near a six-week high, making bullion more expensive for overseas buyers and adding further pressure on the metal. “What’s been driving (gold) lower has been the stronger dollar, which in turn is being elevated by ongoing high interest rates pretty much around the world,” said Edward Meir, analyst at Marex.
Market sentiment around monetary policy has also shifted, with traders pricing in a potential Fed rate move before year-end. According to CME Group’s FedWatch tool, markets see a 60% chance of a change by December.
Oil prices climbed as investors weighed the likelihood of progress in US-Iran negotiations, with US Secretary of State Marco Rubio saying there had been “some good signs” in talks, although issues around Iran’s uranium stockpile and control of the Strait of Hormuz remain unresolved. Higher crude prices have added to inflation concerns, reinforcing expectations that rates could stay higher for longer.
While gold is often viewed as a hedge against inflation, it typically struggles in high-rate environments due to its lack of yield. Attention also turned to US President Donald Trump, who is set to swear in Kevin Warsh as Federal Reserve chair at the White House.
Elsewhere in precious metals, silver slipped 0.7% to $76.18 per ounce but remained on track for a 0.4% weekly gain. Platinum fell 1% to $1,945.97 and palladium dropped 0.5% to $1,371.90, with both heading for weekly declines.
Reuters
