SINGAPORE: Gold prices dropped on Friday and were on track for a second consecutive weekly loss, weighed down by a slight rebound in the US dollar and reduced geopolitical concerns following the Israel-Iran truce. Investors also looked ahead to US inflation data for further signals on the Federal Reserve’s interest rate path.
Spot gold fell 1 per cent to $3,292.19 per ounce as of 0402 GMT, bringing its weekly decline to 2.2 per cent.
“This week’s dip is due to the Israel-Iran peace deal,” said Brian Lan, managing director at GoldSilver Central in Singapore. He added that gold prices are consolidating with a slight downward bias and are expected to remain near current levels.
Tensions in the Middle East eased after a ceasefire between Iran and Israel took effect on Tuesday, following 12 days of the most intense clashes between the two nations. Both sides are now seeking to return to normal life.
Investors are now focused on the US core personal consumption expenditure data, due at 1230 GMT, for guidance on the Fed’s next move. A Reuters poll of analysts expects a monthly increase of 0.1 per cent and a 2.6 per cent annual rise.
Markets currently anticipate a total of 63 basis points of interest rate cuts this year, beginning in September.
US President Donald Trump has argued that soft inflation data is enough reason for the Fed to begin cutting rates. However, only two Fed policymakers so far have indicated support for a potential rate cut at the central bank’s July meeting.
Gold tends to perform well in a low-interest-rate environment, as it does not offer a yield.
“I think what could be happening is that some length is leaving gold and finding its way into other precious metals, like platinum and palladium… So maybe some speculative rotation at work,” said Edward Meir, analyst at Marex.
Spot silver fell 0.7 per cent to $36.38 per ounce. Platinum declined 2.2 per cent to $1,386.75 after touching its highest level in nearly 11 years, while palladium rose 0.9 per cent to $1,142.49, its highest since October 2024.
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