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Profit-Taking and Dollar Strength Weigh on Gold
Gold prices declined over 1% on Friday, pressured by a stronger US dollar and investor profit-taking after recent record highs. However, ongoing geopolitical tensions and expectations of Federal Reserve interest rate cuts kept gold on track for a third consecutive weekly gain.
Spot gold fell 1.4% to $3,001.03 per ounce as of 10:17 a.m. ET (1457 GMT), while US gold futures declined 1.2% to $3,007.80. Despite the dip, gold has gained 0.7% this week.
Safe-Haven Demand Supports Bullion
Gold has surged this year, setting 16 record highs, including an all-time peak of $3,057.21 per ounce on Thursday. Analysts attribute this rise to geopolitical risks, economic uncertainty, and expectations of Fed rate cuts.
Marex analyst Edward Meir noted that profit-taking and a stronger dollar contributed to Friday’s pullback. The US dollar index rose 0.2%, reaching a two-week high, making gold more expensive for overseas buyers.
Zaner Metals strategist Peter Grant highlighted that trade concerns and geopolitical risks remain key factors supporting safe-haven demand for gold.
Fed Rate Cut Expectations and Geopolitical Risks
The US Federal Reserve held interest rates steady on Wednesday, but signaled two rate cuts by year-end. Traders now expect at least two 25-basis-point rate reductions, with the first fully priced in for July, according to LSEG data.
Additionally, escalating geopolitical tensions, including Israel’s intensified air, land, and sea strikes in Gaza, have contributed to market uncertainty.
Other Precious Metals Decline
- Silver dropped 2.2% to $32.80 per ounce
- Platinum fell 1.3% to $972.25 per ounce
- Palladium remained steady at $952.04
All three metals were on track for weekly losses.
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