Gold prices fell on Friday as the dollar gained strength, nearing a one-month high. Investors were looking forward to an important inflation report set to be released later in the day for more clarity on the direction of U.S. monetary policy. Spot gold fell by 0.1%, trading at $4,995.91 per ounce as of 0149. U.S. gold futures for April delivery rose by 0.3%, hitting $5,013.60. The dollar was poised to finish its strongest weekly performance since October, bolstered by a range of encouraging economic indicators, a more assertive approach from the Federal Reserve, and persistent tensions between the U.S. and Iran that kept the market on edge.
The markets in Mainland China, Hong Kong, Singapore, and Taiwan were closed for the Lunar New Year holidays, leading to low trading volumes and the possibility of volatile price movements, as noted by traders. Investors were closely monitoring the Personal Consumption Expenditure data, which is the Federal Reserve’s favored gauge of inflation, in search of additional insights into U.S. monetary policy. Non-yielding bullion often shows strong performance in settings with low interest rates.
Markets currently expect three 25-basis-point rate cuts this year, as shown by CME’s FedWatch Tool. Goldman Sachs noted in a recent update that it expects significant upside potential to its gold price forecast of $5,400 by the end of 2026, especially with increased diversification in the private sector as shown in call-option structures. It also indicated that it upholds a positive medium-term outlook for gold prices, which may be accompanied by increased volatility.
U.S. President Donald Trump issued a warning to Iran on Thursday, emphasizing that the nation needs to come to an agreement concerning its nuclear program or encounter serious repercussions. He set a period of 10 to 15 days for this negotiation, leading to a reaction from Tehran, which warned of retaliation against U.S. bases in the area if provoked. Spot silver decreased by 0.1% to $78.29 per ounce. Spot platinum decreased by 0.3% to $2,064.27 per ounce, while palladium dropped by 0.5% to $1,677.19.