NEW YORK / Content Syndication Services / – Gold prices headed for a third straight weekly loss on Friday as a stronger U.S. dollar and firmer rate expectations weighed on bullion. Spot gold fell 2.1% to $4,121.95 an ounce by 0508 GMT. The metal touched its lowest level since June 11. It was down 3.8% for the week.
U.S. gold futures for August delivery dropped 2.5% to $4,139.40 an ounce. The dollar rose to a one-year high, adding pressure on dollar-priced gold. A stronger dollar makes gold more expensive for buyers using other currencies. That shift can curb demand in global bullion markets.
Markets also tracked U.S. interest rate signals after the Federal Reserve held its benchmark rate at 3.50% to 3.75% this week. The decision kept focus on inflation and future borrowing costs. Higher interest rates reduce the appeal of gold because bullion pays no interest. Gold investors also watched the wider precious metals market for signs of demand.
Dollar strength pressures bullion
Trading remained thinner in parts of Asia because markets in mainland China and Hong Kong were closed for the Dragon Boat Festival. The closures reduced activity in two major regional trading hubs. China remains one of the world’s biggest gold consumers. Hong Kong also serves as a key channel for bullion flows.
Rate expectations strengthened after U.S. policymakers released fresh projections. Nine of 19 central bank officials saw a need for at least one rate increase this year. Market pricing also shifted after the decision. The CME FedWatch Tool showed traders saw an 87% chance of a December rate hike, up from 61% before the meeting.
Precious metals extend losses
Goldman Sachs cut its December gold price target to $4,900 an ounce from $5,400. The bank also removed expectations for a U.S. rate cut this year. The revision came as gold remained under pressure from the dollar and rate outlook. The metal has moved lower for three weeks despite periodic support from geopolitical headlines.
Other precious metals also declined on Friday. Spot silver fell 3.9% to $63.25 an ounce. Platinum lost 2.7% to $1,649.63, while palladium dropped 2.3% to $1,249.69. Silver, platinum and palladium were all set for weekly losses, matching the broader weakness across precious metals.