Spot gold prices were down 2% at $4,557.61 per ounce on Friday, hitting their lowest level since May 4 earlier in the session. The decline was attributed to the strong dollar, increasing yields, and heightened inflation concerns due to the Iran war.
SOUTH-EAST ASIA : Gold fell to a more than one-week low on Friday as US Treasury yields and the dollar climbed, while heightening inflation concerns due to the Iran war reinforced bets for higher interest rates.
Spot gold was down 2% at $4,557.61 per ounce by 2:06 p.m. EDT after hitting its lowest level since May 4 earlier in the session. Prices were down 2.5% so far this week. US gold futures for June settled 2.7% lower at $4,561.90.
"There was a selloff across the for a couple of reasons. The dollar is quite strong today. We're also seeing not just a U.S. increase, but a global increase in yield rates," said Edward Meir, an analyst at Marex. Benchmark 10-year U.S. Treasury yields rose to a near one-year high, increasing non-yielding bullion's opportunity cost.
The dollar was set for its highest weekly gain in two months, making greenback-priced gold more expensive for overseas buyers. US President Donald Trump said his patience with Iran is running out and left China with no major breakthroughs on trade or tangible help to end the war. Crude oil prices have risen more than 40% since the war began on February 28, leading to higher inflation globally.
Central banks tend to hike interest rates during times of inflation, which in turn tends to dim non-yielding bullion's appeal. Traders have largely priced out U.S. interest rate cuts this year while bets for a hike have risen, according to CME's FedWatch Tool. Spot silver fell 7.7% to $77.07 per ounce, platinum lost 3.6% to $1,982.47, and palladium was down 1.5% at $1,415.09. All three were headed for weekly losses.
Silver fell as much as 9% earlier and was on track for its worst daily performance since March 3.
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