Gold Falls as Dollar Rises and Investors Await U.S. Inflation Data
Gold prices declined on Friday as the U.S. dollar reached its highest levels of the month, while investors awaited a crucial inflation report to determine the direction of monetary policy in the United States.
Spot gold recorded a slight decrease of 0.1% to $4995.91 per ounce by 01:49 GMT, while U.S. gold futures for April delivery rose by 0.3% to $5013.60, according to Reuters.
* Dollar Takes Center Stage
The dollar achieved its strongest weekly performance since October, supported by a series of positive economic data and expectations of the Federal Reserve leaning towards further monetary tightening, alongside escalating tensions between the United States and Iran.
* Asian Markets Affected by Holidays
Markets in China, Hong Kong, Singapore, and Taiwan are closed for the Lunar New Year holidays, leading to reduced trading volumes and an increased likelihood of market volatility.
* Anticipation for Inflation Data
Investors are focusing on personal consumption expenditures data, the Federal Reserve's preferred measure of inflation, for indications on the future path of interest rates.
Gold, which does not yield returns, typically rises when interest rates are low.
* Ongoing Geopolitical Tensions
In a related context, U.S. President Donald Trump warned Iran of the necessity to reach an agreement regarding its nuclear program, indicating a deadline of 10 to 15 days, or else "very bad things" will happen.
Tehran responded by threatening to target U.S. bases in the region if attacked.
* Other Precious Metals
Other precious metals also saw declines:
• Silver: down 0.1% to $78.29 per ounce.
• Platinum: down 0.3% to $2064.27 per ounce.
• Palladium: down 0.5% to $1677.19 per ounce.
As markets await updates on inflation and U.S. monetary policy, gold remains sensitive to any changes in the strength of the dollar or geopolitical tensions, making its upcoming movements of wide interest among investors and traders.
