Gold Heads for First Weekly Drop After Three-Week Gain
Gold is heading for its first weekly decline in three, as a slight easing of geopolitical tensions in the Middle East dampened demand for the safe-haven asset and the Federal Reserve’s inflation warning raised the prospect of fewer interest rate cuts.
Bullion fell 0.5% to trade near $3,353 an ounce on Friday, and is down more than 2% for the week. U.S. President Donald Trump will decide whether to join Israel’s strikes on Iran within two weeks, his spokesman said, easing concerns of imminent action that could escalate hostilities, threaten energy flows and spur inflation.
The easing tensions came after Fed Chair Jerome Powell earlier this week flagged inflation risks from the impact of Trump’s tariff agenda. That could make it harder for the central bank to lower borrowing costs, something that would be negative for bullion, an asset that pays no interest and performs better in a lower interest rate environment.
The precious metal is still up more than a quarter this year, and remains not far below a record set in April, just above $3,500. Still, there were some signs this week that investors are favoring platinum as a safe haven given the high level of bullion.
Major Wall Street banks have been divided on whether gold can continue its record-breaking rally. Goldman Sachs Group Inc. reiterated its forecast for $4,000 an ounce next year, while Citigroup Inc. said it sees prices falling below $3,000 by 2026.
Spot gold fell 0.5% to $3,353.59 an ounce as of 10:51 a.m. in Singapore. The Bloomberg Dollar Spot Index fell 0.1%, but is still higher for the week. Silver and platinum declined, while palladium was little changed.
Source: Bloomberg
