By Anushree Mukherjee
(Reuters) – Gold prices dropped on Friday and were poised for their steepest weekly decline in six months, as a stronger dollar and waning trade war concerns dampened its appeal as a safe-haven asset.
Spot gold shed 0.6% to $3,221.19 an ounce as of 0624 GMT. Bullion has lost more than 3% so far this week and is set for its worst weekly performance since November 2024.
U.S. gold futures fell 0.1% to $3,224.40.
The dollar has gained 0.2% so far this week and is headed for its fourth straight weekly gain, making greenback-priced gold more expensive for overseas buyers. [USD/]
“Gold prices faced heavy selling pressure this week as markets cheered (a) de-escalation in the U.S.-China trade (war),” said Ilya Spivak, head of global macro at Tastylive.
Earlier this week, the U.S. and China agreed to temporarily slash the harsh tit-for-tat tariffs imposed in April.
Meanwhile, U.S. producer prices fell unexpectedly in April and retail sales growth slowed, data showed.
Consumer prices rose less than expected last month, a report showed.
On Thursday, Federal Reserve Governor Michael Barr said the U.S. economy is on solid footing with inflation headed for the central bank’s 2% target, but trade policies have clouded the outlook.
Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low-rate environment.
“On the plus side, gold price dips continue to attract buyers, which shows that the precious metal remains a favoured asset, with the global growth and inflation outlooks still looking rather murky,” said KCM Trade Chief Market Analyst Tim Waterer.
Physical gold demand improved across most key Asian hubs this week as a pullback in global prices sparked buying interest. [GOL/AS]
Spot silver fell 0.7% to $32.44 an ounce, platinum dropped 0.3% to $986.35 and palladium lost 1.2% to $957.20.
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Sumana Nandy and Sherry Jacob-Phillips)
