Gold prices saw a slight decline on Friday as the U.S. dollar strengthened to a 2-1/2-month high. However, the precious metal was on track for its best weekly performance in six weeks, ahead of a key speech by the Federal Reserve Chair, which could provide insights into the future trajectory of interest rates.
Spot gold edged down by 0.2% to $1,914.50 per ounce by 0743 GMT, while U.S. gold futures also dropped by 0.2% to $1,943.10.
During the week, gold has managed to rise about 1.3%, potentially marking its first week of gains for the month. Prices had climbed to their highest level since August 10 on Thursday.
According to Matt Simpson, a senior analyst at City Index, the recent false break of the $1,900 level led to a rally towards the $1,920 region. However, Powell’s speech could have the power to either push gold down to $1,900 or up to $1,940. The stronger U.S. dollar is acting as a headwind for gold.
The U.S. dollar was headed for its sixth consecutive weekly gain, causing gold to be more expensive for international buyers.
Two Fed officials noted on Thursday that they welcomed the recent increase in bond market yields and expressed the possibility that further interest rate increases might not be necessary.
Investors are closely awaiting speeches by Fed Chair Powell and European Central Bank President Christine Lagarde at the annual economic symposium in Jackson Hole, Wyoming. The central theme of the event is “higher for longer,” with officials indicating the potential need for tighter policy or a prolonged plateau.
In the broader metals market:
Spot silver remained stable at $24.13.
Silver and platinum were en route to their strongest weekly performances since July 14, while palladium appeared set for a second consecutive weekly decline.
