Gold Prices Decline for Two Consecutive Weeks Due to Dollar Strength and Easing Geopolitical Tensions

Gold prices witnessed a noticeable decline during trading on Friday, June 27, heading towards recording weekly losses for the second consecutive week, driven by a slight increase in the value of the US dollar and a reduction in tensions between Israel and Iran following a ceasefire agreement.

At the same time, investors are focusing on US inflation data scheduled to be released later today, which may provide clearer indications about the future monetary policy of the Federal Reserve.

By 02:34 GMT, spot gold fell by 0.4% to reach $23313.23 per ounce, marking a weekly decline of around 1.7%, while US gold futures dropped by 0.7% to $23325.70 per ounce. The 0.2% increase in the dollar index against major currencies added pressure on buyers using other currencies, negatively impacting demand for the yellow metal.

Brian Lan, Managing Director at Gold Silver Central in Singapore, attributed this decline to the "ceasefire agreement between Iran and Israel," noting that "prices remained stable with a slight downward trend, and are likely to stay at their current levels in the near term." This decline came after the ceasefire went into effect last Tuesday, ending 12 days of escalation between the two countries, allowing markets to reassess fundamental economic factors.

In a related context, investors are awaiting the release of the Core Personal Consumption Expenditures (PCE) Index - the Federal Reserve's preferred measure of inflation - scheduled to be announced at 12:30 GMT.

Reuters analysts' forecasts suggest a monthly increase of 0.1% and an annual increase of 2.6% in the index, while market expectations lean towards a 63-basis-point reduction in US interest rates by 2025, with rate cuts expected to begin at the September meeting.

As for other precious metals, silver remained at $36.63 per ounce, while platinum declined by 1.8% to $1391.28 after reaching its highest level in 11 years, and palladium rose by 1.4% to $1147.78, its highest level since October 2024.