Gold heads for second weekly loss, investors eye US inflation data
Gold fell on Friday and was headed for a second weekly loss, as a slight uptick in the dollar and the Israel-Iran truce weighed on prices, with markets eyeing U.S. inflation data for clues into the Federal Reserve's interest rate trajectory.
Spot gold slipped 1% to $3,292.19 per ounce as of 0402 GMT. Bullion has lost 2.2% so far this week.
U.S. gold futures fell 1.3% to $3,305.20.
The dollar rose 0.2% against its rivals, making greenback-priced bullion more expensive for overseas buyers.
This week's dip is due to the Israel-Iran peace deal, said Brian Lan, managing director at GoldSilver Central, Singapore, adding that prices are consolidating with a slight downward bias and likely to stay around current levels.
Iranians and Israelis have sought to resume normal life after 12 days of the most intense confrontation ever between the two foes and a ceasefire that took effect Tuesday.
Investors are awaiting the U.S. core personal consumption expenditure data due at 1230 GMT for further insight into the Fed's monetary policy outlook, with analysts polled by Reuters forecasting a 0.1% monthly increase and a 2.6% annual rise. Markets are currently pricing in a 63-basis-point rate cut this year, starting in September.
U.S. President Donald Trump says that tame inflation means the Fed should already be reducing its policy rate, but so far only two Fed policymakers to date embracing the possibility of a rate cut at the central bank's July meeting.
Gold thrives in a low-rate environment as it is a zero-yielding asset.
"I think what could be happening is that some length is leaving gold and finding its way into other precious metals, like platinum and palladium...So maybe some speculative rotation at work," Marex analyst Edward Meir said.
Spot silver was down 0.7% at $36.38 per ounce, platinum fell 2.2% to $1,386.75, after hitting its highest level in nearly 11 years, while palladium gained 0.9% to hit its highest since October 2024 of $1,142.49. - Reuters
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