Gold set for worst drop in six months: Find out why

Gold prices dropped on Friday and were poised for their steepest weekly decline in six months, as a stronger dollar and waning trade war concerns dampened its appeal as a safe-haven asset.

Read-Gold prices fall: What’s hampering its safe-haven appeal?

Spot gold was down 0.8 per cent at $3,213.56 an ounce, as of 0429 GMT. Bullion has lost 3.3 per cent so far this week and is set for its worst weekly performance since November 2024.

US gold futures shed 0.3 per cent to $3,217.20.

Dollar gain

The dollar has gained 0.4 per cent for the week so far and was headed for its fourth straight weekly gain, making greenback-priced gold more expensive for overseas buyers.

“Gold prices faced heavy selling pressure this week as markets cheered (a) de-escalation in the US-China trade (war),” said Ilya Spivak, head of global macro at Tastylive.

Tit-for-tat tariffs

Earlier this week, the US and China agreed to temporarily slash the harsh tit-for-tat tariffs imposed in April.

Meanwhile, data showed US producer prices fell unexpectedly in April and retail sales growth slowed.

Consumer prices rose less than expected in April, a report showed.

Trade policies

On Thursday, Federal Reserve Governor Michael Barr said the US economy is on solid footing with inflation heading to the central bank’s 2 per cent target, but trade policies have clouded the outlook.

Markets are pricing in 57 basis points of rate cuts this year, with the easing projected to start in September.

Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low-rate environment.

“On the plus side, gold price dips continue to attract buyers which shows that the precious metal remains a favoured asset, with the global growth and inflation outlooks still looking rather murky,” said KCM Trade Chief Market Analyst Tim Waterer.

Spot silver fell nearly 1 per cent to $32.37 an ounce, platinum was down 0.5 per cent at $984.83 and palladium lost 1.2 per cent to $956.43.