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Gold Prices Steady but Head for Steep Weekly Losses Amid Waning Rate Cut Hopes

Gold prices stabilized in Asian trading on Friday after experiencing significant declines throughout the week. Concerns about prolonged high interest rates in the U.S. have led to a pullback in the yellow metal from its recent record highs.


Current Prices and Trends:

Spot gold edged up by 0.2% to reach $2,332.77 an ounce.


Gold futures expiring in June slightly declined by 0.1% to $2,333.85 an ounce by 00:37 ET (04:37 GMT).


Despite the minor uptick, gold is poised to incur substantial weekly losses, estimated at around 3.4%.

Factors Contributing to Weekly Losses:

Gold experienced a sharp decline from its record highs earlier in the week, primarily due to concerns about persistently high interest rates.

The dollar strengthened amid rate hike expectations, further pressuring gold prices.

Safe-haven demand for gold diminished, as geopolitical tensions in the Middle East failed to escalate following the death of the Iranian President, contrary to initial expectations.

Rate Hike Concerns and Market Sentiment:

Hawkish signals from the Federal Reserve, particularly regarding concerns over stubborn inflation, have heightened expectations of prolonged high interest rates.

While the likelihood of further rate hikes remains uncertain, traders have significantly reduced expectations for rate cuts in 2024, reflecting a nearly equal probability of a rate cut or hold in September according to the CME Fedwatch tool.

Higher interest rates increase the opportunity cost of holding non-yielding assets like gold, negatively impacting its appeal to investors.

Other Precious Metals and Industrial Metals:

Platinum futures rose by 0.4% to $1,029.90 an ounce, while silver futures increased by 0.4% to $30.582 an ounce.

Copper futures on the London Metal Exchange and U.S. copper futures rebounded slightly after sliding from record highs earlier in the week.

Cooling sentiment towards China, coupled with uncertainties surrounding trade tensions with the U.S. and Taiwan, weighed on copper prices.


The gold market remains sensitive to developments surrounding interest rate expectations and broader market sentiment. Traders are closely monitoring the Federal Reserve’s stance on inflation and interest rates for further cues.

Concerns about geopolitical tensions and economic uncertainties could offer some support to gold prices, but the predominant focus remains on monetary policy decisions and economic indicators.