Gold prices fell on Friday and were on track for a weekly loss, pressured by concerns around inflation and potential US Federal Reserve interest rate hikes, according to a Reuters report in The Hindu BusinessLine. Spot gold was down 0.5% at $4,191.17 per ounce, as of 0252 GMT, and was set for a weekly loss of 3.2%. US gold futures for August delivery rose 2.4% to $4,212.70.
Price Overview
The table below summarizes the key precious metals prices and their weekly changes:
| Metal | Price (per ounce) | Daily Change | Weekly Change |
|---|---|---|---|
| Spot Gold | $4,191.17 | -0.5% | -3.2% |
| US Gold Futures (Aug) | $4,212.70 | +2.4% | — |
| Spot Silver | $67.10 | -0.4% | Negative |
| Platinum | $1,731.40 | +0.7% | Negative |
| Palladium | $1,289.33 | +1.6% | +5% |
According to the report, silver and platinum were both headed for a weekly loss, while palladium gained about 5% for the week so far.
Geopolitical Drivers
Gold fell to an over six-month low on Thursday before closing higher at $4,219.69, after US President Donald Trump called off planned military strikes on Iran and signalled an imminent peace deal. Edward Meir, an analyst at Marex, said the price is “completely being driven by geopolitical headlines.”
Trump on Thursday said the United States and Iran could sign a peace deal as soon as this weekend that would reopen the Strait of Hormuz to shipping. However, Iran countered that it had not reached a final decision on an agreement. The uncertainty kept markets on edge.
Inflation and Rate Hike Fears
Gold has lost about 20% since the Iran war began, on fears that rising energy costs could spur inflation, prompting central banks to keep interest rates higher and raising the opportunity cost of holding the non-yielding metal. US producer prices increased more than expected in May, leading to the largest annual gain in 3-1/2 years as the West Asia conflict drove up the cost of energy products.
Traders are currently pricing a 60% chance of a US rate hike in December, according to the CME Group’s FedWatch tool. Meir added, “The markets will be paying attention to any signal that the Fed could raise rates, and if they hint at moving in that direction, I think gold could probably break below the $4,000 mark.”
ETF Holdings
Holdings of the largest gold-backed exchange-traded fund (ETF), New York’s SPDR Gold Trust, fell about 0.3% to 923.89 tonnes on Wednesday, indicating weakening investor appetite.
With the Fed policy outlook and geopolitical developments still in flux, gold prices are likely to remain volatile. Key upcoming data releases include US inflation reports and any official statements from the Federal Reserve, which traders will scrutinize for rate hike signals.
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