A higher U.S. dollar weighed on gold prices Friday, but the bullion was poised for a third consecutive weekly gain due to the Federal Reserve’s rate drop indications for the year and demand for safe haven assets amid geopolitical and economic uncertainty.
As of 0500 GMT, spot gold dropped 0.5% to $3,029.86 an ounce. Bullion has increased by around 1.5% this week and hit an all-time high of $3,057.21 per ounce on Thursday.
At $3,037.50, U.S. gold futures GOLD fell 0.2%.
According to Kelvin Wong, senior market analyst, Asia Pacific at OANDA, “the strength of the U.S. dollar across the board among the major currencies is causing gold to trade down slightly in today’s Asia session.”
As anticipated, the Fed maintained its target rate in the 4.25%–4.50% range on Wednesday. By the end of the year, policymakers anticipate two quarter percentage point decreases from the central bank.
Fed Chair Jerome Powell stated during the policy meeting that the U.S. economy appears to have been skewed towards slower growth and at least temporarily higher inflation as a result of U.S. President Donald Trump’s first measures, which included hefty import tariffs.
A two-month-old truce was essentially destroyed Thursday as Israel restarted bombing and ground operations, killing 91 Palestinians in bombings throughout Gaza.
“All the fundamentals are there for (gold) to keep trending higher,” Kyle Rodda, a financial market analyst with Capital.com, stated.
“A pull back to the $3,000s for a bit of a recharge before extending the uptrend is quite likely.”
Due to a variety of causes, including the uncertainty around tariffs, the anticipated of rate cuts, and the resurgence of tensions in the Middle East, gold has reached 16 record highs this year, four of which have been over the critical $3,000 threshold.
When interest rates are low, the non-yielding metal, which protects against economic and geopolitical instability, flourishes.
Platinum (PL1) down 0.4% to $980.75, palladium (XPDUSD1) dropped 0.6% to $946.01, while spot silver (XAGUSD1) dropped 1.2% to $33.13 an ounce. Every week, all three were on the verge of losing.
