Gold prices were mixed on Friday but remained on course for a third consecutive weekly decline, weighed by a strong US dollar and a hawkish Federal Reserve that has tempered expectations for near-term interest rate cuts.
Gold futures (GC=F) rose 2.3% to $4,709.70 a troy ounce, while spot prices retreated 0.8% to $4,695.78 at the time of writing.
“Gold held some important technical supports in the weekly time frame and gold may see a recovery to the level where it broke down, around $4,800,” Nicholas Frappell, global head of institutional markets at ABC Refinery told Reuters.
Even so, bullion has lost more than 6% this week. Spot gold has declined over 10% since the US Israeli strike on Iran on February 28.
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The Federal Reserve kept rates unchanged on Wednesday and signalled that inflation could rise.
Gold is typically viewed as a hedge against inflation, but higher interest rates increase the appeal of yield bearing assets, while a stronger dollar makes bullion more expensive for holders of other currencies.
“After notable underperformance during the Middle East conflict, participants were poised to sell rather than buy gold and were listening out for a reason to confirm their sentiments,” Frappell said.
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