US, June 26 : Gold prices remained under pressure on Friday and were on course to register a fourth consecutive weekly loss as the US dollar strengthened amid growing expectations that the US Federal Reserve will continue tightening monetary policy. Investors also monitored the fragile ceasefire between the United States and Iran, which continued to fuel uncertainty across global financial markets.
Spot gold edged down 0.1% to $4,022.95 per ounce during early trading, leaving the precious metal on track for a weekly decline of around 3.4%. US gold futures for August delivery also slipped 0.2% to $4,038.10 per ounce.
Market sentiment remained cautious after the International Maritime Organization temporarily suspended its ship escort operations through the Strait of Hormuz following reports that a commercial vessel had come under attack. The development renewed concerns that tensions in the Middle East could escalate despite the recently announced US-Iran peace agreement.
The stronger US dollar further weighed on bullion prices. The dollar index was poised to record its second consecutive weekly gain, making gold more expensive for buyers using other major currencies and reducing global demand for the safe-haven asset.
Fresh economic data from the United States also influenced market expectations. Inflation accelerated further in May, climbing above the 4% mark for the first time in three years, largely due to higher energy prices linked to geopolitical tensions in the Middle East.
Federal Reserve officials continued to strike a cautious tone on inflation. Chicago Federal Reserve President Austan Goolsbee acknowledged that recent services inflation data offered limited signs of improvement but warned that overall price pressures remain elevated and continue moving away from the central bank’s long-term objective.
Similarly, New York Federal Reserve President John Williams stated that inflation is expected to ease gradually over the coming months but remains significantly above the Fed’s 2% target. His comments reinforced expectations that policymakers may need to keep interest rates higher for longer.
Financial markets are now pricing in three additional interest rate hikes this year, with traders assigning roughly a 63% probability that the Federal Reserve will raise rates again at its September policy meeting.
Meanwhile, demand for physical gold in Asia showed signs of moderation. Official data from Hong Kong’s Census and Statistics Department revealed that China’s net gold imports through Hong Kong declined by nearly 38% in May compared with the previous month, falling to 53.674 metric tonnes from 86.715 metric tonnes recorded in April.
Other precious metals also traded lower. Spot silver slipped 0.2% to $57.77 per ounce, platinum remained largely unchanged at $1,600.95, while palladium gained 0.4% to $1,188.97. Despite the mixed daily performance, all three metals were also on track to post weekly losses.
Investors are now awaiting the release of the final US consumer sentiment reading from the University of Michigan later in the day, which could provide fresh clues about the strength of the US economy and the Federal Reserve’s future interest rate decisions.