Gold dips, heads for worst week in six months amid stronger dollar

WASHINGTON: Gold prices eased on Friday and were poised for their steepest weekly decline in six months, as a stronger dollar and waning trade war concerns dampened its appeal as a safe-haven asset.

Spot gold fell 0.5 per cent to $3,223.06 an ounce as of 0222 GMT. Bullion has lost about 3 per cent so far this week and is set for its worst weekly performance since November 2024.

US gold futures shed 0.1 per cent to $3,224.90.

The dollar added 0.3 per cent for the week so far and was headed for its fourth straight week of gains, making greenback-priced gold more expensive for overseas buyers.

“Gold prices faced heavy selling pressure this week as markets cheered (a) de-escalation in the US-China trade (war),” said Ilya Spivak, head of global macro at Tastylive.

Earlier this week, the US and China agreed to temporarily slash the harsh tit-for-tat tariffs imposed in April.

Meanwhile, data showed US producer prices fell unexpectedly in April, while retail sales growth slowed.

Consumer prices rose less than expected in April, a report showed.

On Thursday, Federal Reserve Governor Michael Barr said the US economy is on solid footing with inflation heading to the central bank’s 2 per cent target, but trade policies have clouded the outlook.

Markets are pricing in 57 basis points of rate cuts this year, with the easing projected to start in September.

Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low-rate environment.

“On the plus side, gold price dips continue to attract buyers which shows that the precious metal remains a favoured asset, with the global growth and inflation outlooks still looking rather murky,” said KCM Trade Chief Market Analyst Tim Waterer.

Spot silver eased 0.6 per cent to $32.49 an ounce, platinum fell 0.3 per cent to $986.58 and palladium lost 1.1 per cent to $957.42.

Read next: Oil prices inch up, set for weekly gain on US-China trade optimism