Gold prices rose on Friday, but the precious metal was still on track for its first weekly decline in three weeks as hopes of aggressive US interest rate cuts waned. The Federal Reserve’s recent meeting minutes revealed a more hawkish tone, sparking doubts among traders.
Spot gold saw a 0.4 per cent increase to reach $2,338.57 per ounce by midday on Friday, after hitting a record high earlier in the week. However, it has since dropped by about 5 per cent. Meanwhile, US gold futures were up 0.1 per cent at $2,339.80.
Analysts noted that as the market corrects lower, some investors might see this as an opportunity to jump in after missing the initial rally. The dollar index also dipped slightly, making gold more affordable for overseas buyers.
The Fed’s discussion on whether current rates are enough to combat inflation has led to speculation that interest rates might not be cut as aggressively as previously expected. This has caused Treasury yields to rise and the dollar to strengthen, putting pressure on gold prices.
Silver also saw a 1.1 per cent increase to $30.42, while platinum edged up and palladium fell slightly. Despite these movements, all three metals were heading for weekly losses.
In terms of holdings, SPDR Gold Trust saw a decrease, while iShares Silver Trust reported an increase. Overall, the market remains uncertain as traders adjust their expectations for future rate cuts.
