Gold prices saw a modest rise in Asian trading on Friday but are set to end the week with significant losses as traders remain focused on the U.S. dollar and await further signals on interest rates.
Gold Prices: Brief Highs Followed by Decline
The yellow metal briefly reached record highs in July, but a combination of profit-taking and market volatility has led to a sharp decline since then. Spot gold increased by 0.3% to $2,371.23 per ounce, while August gold futures rose by 0.7% to $2,369.90 per ounce as of 00:43 ET (04:43 GMT).
Weekly Outlook and Federal Reserve Anticipations
Spot gold is down 1.2% for the week, following a notable drop on Thursday prompted by stronger-than-expected U.S. second-quarter gross domestic product (GDP) data. The robust GDP figures have bolstered expectations for a soft landing for the U.S. economy, potentially reducing gold’s appeal as a safe haven.
Despite this, traders are largely anticipating a rate cut by the Federal Reserve in September. The upcoming Personal Consumption Expenditures (PCE) price index data, the Fed’s preferred inflation measure, is expected to show a mild easing in inflation for June. This data is anticipated to influence the Fed’s rate decisions in the near term.
Lower interest rates generally benefit gold and other precious metals by reducing the opportunity cost of holding non-yielding assets. Additionally, increased safe-haven demand for gold may arise as the U.S. presidential race intensifies, with recent polls showing a tight contest between Republican nominee Donald Trump and Democratic frontrunner Kamala Harris.
Precious Metals Mixed: Platinum Up, Silver Down
Other precious metals were mixed on Friday, with both experiencing steep losses over the week. Platinum futures rose by 0.4% to $948.00 per ounce, but were down 2.7% for the week. In contrast, silver futures fell by 0.3% to $27.89 per ounce, marking a nearly 5% slump over the week.
