Gold prices fell on Friday as the dollar ticked up, while investors awaited a key U.S. inflation report that may provide further insight into the Federal Reserve’s rate cut trajectory.
In Dubai, gold rates declined, with 24-carat gold and 22-carat gold falling AED2 to AED397.25 and AED367.75, respectively. Additionally, 21-carat gold declined AED1.75 to AED352.75, while 18-carat gold dipped AED1.5 to AED302.25.
Globally, spot gold declined 0.81 percent to $3,294.53 at 4:03 GMT. Bullion is down 1.7 percent so far this week. Meanwhile, U.S. gold futures lost 0.69 percent to $3,320.94.
The U.S. dollar gained 0.19 percent to 99.47, making gold prices more expensive for holders of other currencies.
Markets await U.S. PCE data
Gold prices fell as investors awaited the April U.S. personal consumption expenditures (PCE) price index report, the Fed’s preferred inflation measure, which is due at 12:30 GMT. The U.S. PCE is expected to remain at 0.1 percent month-on-month, while the year-on-year figure is expected to be at 2.2 percent.
San Francisco Fed President Mary Daly said on Thursday that the Fed could still reduce interest rates twice this year, but rates should remain steady for now to ensure inflation is on track to reach the central bank’s 2 percent target. A lower interest rate environment supports non-yielding assets like bullion.
Gold prices rose past $3,300 on Thursday, helped by a softer U.S. jobs report. The U.S. Department of Labor revealed that the number of Americans filing for unemployment claims exceeded estimates. The report added pressure on the Fed to ease rates as the risk of high unemployment has increased.
This, along with the confirmation of a contraction in the U.S. economy in Q1 2025, pressured the U.S. dollar, further supporting gold prices.
Trump’s tariffs reinstated
In addition, a federal appeals court temporarily reinstated President Donald Trump’s tariffs on Thursday following a U.S. trade court’s ruling on Wednesday that Trump had overstepped his authority by imposing these levies and ordered an immediate halt.
“Currently, gold is lacking a clear directional trend, primarily due to conflicting macroeconomic signals and investor hesitation. Markets are waiting to assess the full economic impact of Trump’s shifting trade policies,” stated Ole Hansen, head of commodity strategy, Saxo Bank.
U.S. Treasury Secretary Scott Bessent said on Thursday that U.S. trade talks with China are “a bit stalled,” and getting a deal done will likely need the direct involvement of Trump and Chinese President Xi Jinping.
“Most analysts expect the broader effects to be negative, which could prove supportive for gold, particularly under the looming risk of stagflation—a scenario characterized by slowing growth combined with rising inflation,” Hansen added.
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Other precious metals
As gold prices declined, the precious metals market declined. Spot silver dipped 0.95 percent to $33.03, while platinum dipped 0.28 percent to $1,079.27. In addition, palladium dropped 0.4 percent to $969.28.
