Gold prices continued their downward trajectory on Friday, with spot gold slipping 0.2% to $4,020.88 per ounce and U.S. gold futures falling 0.3% to $4,037.30. This movement placed gold on track for a fourth consecutive weekly decline, amounting to an almost 3% loss for the week and roughly an 11% drop for the month. The decline was driven primarily by a resilient U.S. dollar, which remained near a 13‑month high and was poised for a second straight weekly gain, thereby increasing the cost of gold for holders of other currencies.
The dollar’s strength is underpinned by rising expectations that the Federal Reserve may need to tighten policy further, as inflation remains elevated. Data released on Thursday showed the U.S. personal consumption expenditures (PCE) price index—a preferred inflation gauge for the Fed—rose 4.1% year‑over‑year in May, the highest reading in more than three years and the first time the index has exceeded 4% since 2023. Consequently, the CME FedWatch tool indicated a 63% probability of a Fed rate increase by September. Higher interest rates typically diminish the appeal of bullion, which offers no yield.
Among other precious metals, silver prices fell 1.1% to $57.31 per ounce, positioning the metal for a 12% weekly decline. Platinum slipped 0.2% to $1,600.23 per ounce, extending its streak to a seventh straight weekly loss. In the base metals arena, benchmark copper futures on the London Metal Exchange edged down 0.9% to $13,182.33 a ton, while U.S. copper futures also dropped 0.9% to $69.01 a pound.
Geopolitical developments added a brief note of safe‑haven demand: a cargo vessel reported an attack near the Strait of Hormuz, reviving concerns over Middle‑East tensions despite a preliminary U.S.–Iran peace agreement. However, this episode was insufficient to offset the downward pressure from the stronger dollar and heightened rate‑hike expectations.