A resilient dollar and oil-driven inflation concerns are putting fresh pressure on bullion prices.
Gold is pulling back on Friday as a stronger U.S. dollar and rising interest rate expectations take the shine off the metal. The selloff is modest but points to a broader shift in market sentiment heading into the weekend.
KEY DETAILS
Spot gold fell 0.3% to $4,527.60 per ounce as of 04:11 GMT, putting the metal down roughly 0.2% for the week. June gold futures dropped by the same margin to $4,529.10.
The dollar is holding near a six-week high, which makes dollar-priced gold more expensive for buyers using other currencies, which naturally dampens demand.
Oil prices climbed after U.S. Secretary of State Marco Rubio flagged ongoing friction in U.S.-Iran talks, with Iran's uranium stockpile and control of the Strait of Hormuz still unresolved. Higher oil feeds inflation, and inflation keeps rate hike expectations alive.
CME Group's FedWatch tool now puts the odds of a Fed rate hike before year-end at 60%. Meanwhile, Donald Trump is swearing in Kevin Warsh as the new Fed chair on Friday at the White House.
MARKET REACTION
Silver slipped 0.2% to $76.53 but is still on track for a 0.8% weekly gain. Platinum fell 0.5% to $1,955.66. Palladium dropped 0.2% to $1,375.35, both facing weekly losses.
WHY IT MATTERS
Gold doesn't pay interest. When rates rise, holding it becomes less attractive compared to yielding assets. The dollar-rate combo is a classic headwind for bullion traders.
WHAT TO WATCH
Track U.S.-Iran talks, oil price direction, and any signals from incoming Fed Chair Warsh on the rate path.
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