Gold prices remained unchanged on Friday but are on track for their second consecutive weekly decrease. This is due to concerns that major central banks may adopt significant interest rate rises in order to combat runaway inflation. This is a factor that is impacting on the market for gold.
After reaching a one-week low of $1,820.99 earlier in the afternoon, spot gold was last up 0.1 percent to $1,824.72 per ounce at 02:15 GMT. This is after striking a one-week low earlier in the session. U.S. gold futures dipped 0.2 percent to $1,825.90.
This week, the price of gold has decreased by around 0.9 percent.
Even though he admitted that much higher interest rates may cause an increase in unemployment, Federal Reserve Chair Jerome Powell told lawmakers on Thursday that the central bank’s commitment to bringing down inflation from its highest level in four decades is “unconditional.”
The value of the United States dollar has remained stable, and market participants are increasingly anticipating a rate rise by the Federal Reserve of 75 basis points in July.
Gold bought in dollars is more costly for purchasers holding currencies other than the dollar when the dollar is strong.
On Friday, rates on benchmark 10-year United States Treasury notes rose, which reduced the amount of demand for gold.
Holding bullion, which does not provide any interest, incurs a greater opportunity cost as a result of rising interest rates and bond yields.
According to Simpson, “gold seems vulnerable over the near-term given its failure to breach $1,850, its 200-day average, this week.” He continued by saying that “if it were not for the fear of a worldwide recession, then gold would certainly be lower than it now is.”
On Thursday, the holdings of SPDR Gold Trust, the biggest gold-backed exchange-traded fund in the world, decreased to 1,063.07 tonnes from 1,071.77 tonnes the previous day. This is a decrease of 0.81 percent.
The price of silver on the spot market increased by 0.4 percent to $21.02 per ounce, while the price of platinum increased by 0.9 percent to $915.11 per ounce; nonetheless, both metals were expected to have weekly losses.
Palladium increased in value by 1.4 percent, reaching $1,870.29; for the week, it has increased in value by around 3 percent.