Gold prices fell on Friday as the US dollar ticked higher and investors remained cautious ahead of key US inflation data due later in the day to gauge the Federal Reserve’s monetary policy trajectory.
Spot gold was down 0.7% at $3,292.28 an ounce as of 1145 GMT. Bullion is down 1.9% so far this week.
US gold futures fell 0.8% to $3,290.30.
The dollar rose 0.3% and was on track for a weekly gain, making gold costlier for foreign buyers.
“The US dollar is up slightly, which could be a source of pressure for gold,” said Carsten Menke, analyst at Julius Baer.
“Barring a major surprise to the PCE data, I would not expect gold to show a meaningful reaction. That said, the market seems to be a bit more nervous as of late, suggesting that volatility should stay high in the short-term,” Menke said. The Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation measure, is due at 1230 GMT. The data is likely to show that inflation rose 2.2% in April, according to economists polled by Reuters, compared with a 2.3% increase in March, Reuters reported.
“With US core PCE looming large, there is some hesitance to take new long positions in gold,” said Tim Waterer, chief market analyst at KCM Trade.
Investors are currently anticipating 50 basis points worth of Fed rate cuts by the end of this year, starting in October.
Bullion, which is considered a hedge against economic and geopolitical uncertainty, tends to thrive in a low interest rate environment.
Meanwhile, a federal appeals court temporarily reinstated the most sweeping of President Donald Trump’s tariffs on Thursday, a day after a US trade court ruled he had exceeded his authority and ordered an immediate block.
Spot silver fell 0.6% to $33.14 an ounce, platinum eased 1.2% to $1,068.80 and palladium dropped 0.6% to $967.70.
