Gold prices eased in Asian trading on Friday, pressured by a firmer U.S. dollar as investors scaled back expectations for additional interest rate cuts ahead of a key speech by Federal Reserve Chair Jerome Powell. Broader precious metals also retreated, reflecting the dollar’s strength, which is poised for notable weekly gains.
Spot gold fell 0.3% to $3,328.37 an ounce, while gold futures dropped 0.3% to $3,371.15/oz by 00:54 ET (04:54 GMT). Some safe-haven demand limited further losses, as geopolitical uncertainty persists amid signs that a Russia-Ukraine peace agreement remains distant despite U.S. negotiation efforts.
Gold Faces Second Week of Declines
This week, gold has traded down between 0.2% and 0.5%, on track for a second consecutive week of declines. The pullback reflects reduced expectations for a Fed rate cut in September. Minutes from the Fed’s late-July meeting, released Wednesday, showed most policymakers favoring a near-term hold.
Fed funds futures indicate a 73.1% chance of a 25-basis-point rate cut in September, down sharply from last week’s 92.2% probability, according to CME FedWatch. Elevated rates over a prolonged period continue to pressure gold and other non-yielding assets, as higher yields increase the opportunity cost of holding them compared with Treasuries.
Dollar Strength and Market Focus on Powell
Attention now turns to Powell’s address at the Jackson Hole Symposium later Friday, with investors looking for guidance on the future path of interest rates. Markets will watch to see whether Powell references recent data showing modestly lower inflation and a cooling labor market.
The Fed Chair has previously highlighted uncertainty over the inflationary impact of President Donald Trump’s trade tariffs as a key factor influencing the Fed’s rate decisions. This uncertainty has led traders to scale back bets on a September cut, boosting the dollar and applying downward pressure on metals. The greenback is set for a weekly gain of around 0.9%.
Spot platinum slipped 0.7% to $1,347.85/oz, while spot silver fell 0.2% to $38.0735/oz, both poised for slight weekly gains. Among industrial metals, London Metal Exchange copper futures declined 0.2% to $9,724.10 a ton, with COMEX copper futures down 0.3% to $4.4420 a pound.
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