Gold prices fell on Friday, as higher U.S. Treasury rates dimmed the appeal of non-yielding gold in a week that was dominated by holidays. Markets were focused on Donald Trump’s re-election and the possible impact his inflationary policies could have on the Fed 2025 outlook.
As of 1:41 pm, spot gold dropped 0.6%, to $2,619.33 an ounce. ET (1841 GMT). Bullion is down 0.1% for the week. U.S. Gold futures ended the week 0.8% lower, at $2,631.90.
Bob Haberkorn is a senior market strategist with RJO Futures. He said, “Treasury rates are higher and gold prices will continue to be under pressure until the end of today. We are in a thin market for holidays.”
The dollar index (.DXY) is on track for a fourth consecutive week of gains. This will reduce gold’s appeal to holders of other currencies. Meanwhile, the benchmark U.S. 10-year yields are trading at their highest levels since May 2 which they reached on Thursday.
Gold has risen 28% so far this year. It reached a record-high of $2,790.15 in October. The Federal Reserve’s rate-easing cycle, as well as increased global tensions, were the main factors behind this rally.
The Fed has reduced the number of rate cuts forecast, but most analysts are still bullish about 2025.
The experts believe that geopolitical tensions will persist in certain pockets around the world, central banks will keep up their gold-buying spree and political uncertainty will persist as Trump returns to his White House post.
Gold’s appeal as a safe haven asset is expected to be further enhanced by his proposed tariffs and trade policies that are protectionist.
Haberkorn stated that if central banks continue to buy gold at the same pace, gold could reach $3,000 by summer.
Gold is traditionally more valuable during times of geopolitical and economic turmoil. It also thrives when interest rates are lower.
Spot silver fell 1.3% to $29.41 per ounce, platinum was down 2.1% at $916.30, palladium shed 1.2% to $913.71.
