Gold prices dipped for the second consecutive day on Friday as the US dollar strengthened, driven by hawkish remarks from Federal Reserve officials. The decline in gold prices persisted during the early European session, with investors engaging in repositioning ahead of the release of the US monthly employment data.
The US dollar’s recovery from a nearly two-week low exerted pressure on the non-yielding commodity. Hawkish comments from Federal Reserve officials bolstered the US dollar, leading to a downward trend in gold prices.
Investors are closely watching the upcoming release of the Nonfarm Payrolls (NFP) report, which is expected to provide fresh insights into the Fed‘s rate-cut path. The outcome of the NFP report will likely influence demand for the US dollar and provide directional momentum for gold prices.
Despite the decline in gold prices, geopolitical tensions stemming from the Russia-Ukraine conflict and the risk of further escalations in the Middle East continue to support the safe-haven appeal of gold. This is expected to limit any significant downward movement from the recent all-time peak, as investors seek refuge in assets perceived as safe during times of uncertainty.
