Gold poised for worst week in a month as US rate cut expectations ease
Gold prices fell on Friday and were poised for their worst weekly performance in more than a month after the Federal Reserve tempered expectations for rate cuts and on a temporary easing of concerns about an imminent U.S. attack on Iran.
Spot gold slipped 0.4% to $3,355.97 an ounce, as of 1029 GMT, and was down 2.2% for the week so far. U.S. gold futures shed 1% to $3,372.20.
The dollar was up 0.4% so far this week and poised for its biggest weekly gain in over a month, making gold more expensive for holders of other currencies.
President Donald Trump will decide in the next two weeks whether the U.S. will get involved in the Israel-Iran air war, the White House said on Thursday. Israel and Iran's air war entered a second week on Friday.
Trump's two-week deadline "indicates that things could have a little bit more hope to cool down before the U.S. involvement in that military strike. And I think that's easing some of the anxiety in markets, allowing gold prices to deflate a little", said Nitesh Shah, commodities strategist at WisdomTree.
Gold, a safe-haven asset during times of political and economic uncertainty, also tends to thrive in a low interest rate environment.
On Wednesday, the Fed held interest rates in the central bank's current 4.25%-4.50% range, but slowed its overall outlook for rate cuts in response to a more challenging economic outlook.
Trump reiterated his calls for the Federal Reserve to cut interest rates, saying on Thursday the rates should be 2.5 percentage points lower.
"Gold, silver, and platinum all suffered setbacks as traders booked profits after Wednesday's FOMC meeting," said Ole Hansen, head of commodity strategy at Saxo Bank.
"Gold is likely to extend its current consolidation phase with support around $3,320 followed by $3,245."
Elsewhere, spot silver slipped 0.7% to $36.12 per ounce, while palladium lost 0.3% to $1,047.43. Platinum fell 1.4% to $1,289.78, after hitting its highest level in over 10 years in the previous session.
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The National
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