Global Gold Market: Gold prices are expected to record the largest weekly decline since November; focus on U.S. inflation data
Gold prices fell due to a stronger dollar, expected to record the largest weekly decline since November. Investors are focused on the upcoming U.S. inflation data for clues on Federal Reserve monetary policy. Spot gold is quoted at $2,864.33 per ounce, down 0.4%. Gold prices have dropped 2.5% this week but rose 2.2% in February. The dollar index has increased by 0.7% this week, making gold more expensive for foreign buyers. Market strategists indicate that a stronger dollar may lead to profit-taking
Reuters, February 28 - Gold prices fell on Friday due to a stronger dollar, marking the largest weekly decline since November. Investors are awaiting key U.S. inflation data for clues on the Federal Reserve's monetary policy trajectory.
As of 0459 GMT, spot gold (XAU=) was priced at $2,864.33 per ounce, down 0.4%.
After rising for eight consecutive weeks, gold prices have dropped 2.5% so far this week. However, they rose 2.2% in February.
U.S. futures gold (GCcv1) fell 0.7% to $2,875.00. The dollar index (.DXY) is expected to rise 0.7% this week, making gold priced in dollars more expensive for foreign buyers. (USD/)
IG market strategist Yeap Jun Rong stated, "Although gold is seen as a safe-haven asset, uncertainty in trade due to a stronger dollar may lead to further profit-taking activities."
U.S. President Trump announced on Thursday that his proposal to impose a 25% tariff on goods from Mexico and Canada will take effect on March 4, along with an additional 10% tariff on imports from China, as drugs continue to flow into the U.S. from these countries.
Gold is viewed as a hedge against political risk and inflation, but rising interest rates dampen the appeal of this non-yielding asset.
Investors are currently awaiting the Fed's preferred inflation gauge—the Personal Consumption Expenditures (PCE) price index, which will be released at 1330 GMT.
Yeap said, "I don't expect any significant changes in interest rate pricing. Several components in the CPI and PPI suggest that PCE inflation may remain controlled, so it may not have a major impact on rate expectations."
Philadelphia Federal Reserve Bank President Harker stated on Thursday that he supports keeping U.S. short-term borrowing costs in the current range of 4.25%-4.50%.
Spot silver (XAG=) fell 0.2% to $31.19 per ounce; platinum (XPT=) dropped 0.1% to $948.05; and palladium (XPD=) decreased 0.2% to $917.46. So far this month, all three metals have declined
