Mumbai, 25 May (Commoditiescontrol): Gold prices edged up on Friday as the dollar weakened, but the precious metal recorded its steepest weekly decline in five and a half months amid tempered hopes for U.S. interest rate cuts. Spot gold increased by 0.2% to $2,332.77 per ounce, benefiting from a 0.4% drop in the U.S. dollar index, which made gold cheaper for holders of other currencies. However, U.S. gold futures fell slightly by 0.1% to $2,334.50.
After reaching a record high of $2,449.89 on Monday, gold prices have plummeted by more than $100, marking a 3% drop for the week—the worst since early December. This decline followed the release of minutes from the Federal Reserve’s latest meeting, indicating that achieving the 2% inflation target might take longer than anticipated.
Market sentiment reflected growing skepticism about multiple rate cuts in 2024, with traders now seeing a 63% chance of a single rate cut by November, as per the CME FedWatch Tool. Higher interest rates generally diminish the appeal of non-yielding assets like gold.
Despite the current rate outlook uncertainties, gold has gained 13% this year, driven by strong demand from China and persistent geopolitical tensions, according to analysts.
Other precious metals also saw mixed performances. Spot silver rose 0.5% to $30.25 per ounce after hitting an 11-year high on Monday. Platinum increased by 0.8% to $1,027.25, while palladium dropped 0.7% to $962.50. However, all three metals were poised for weekly losses.
(By Commoditiescontrol Bureau: 09820130172)
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