Gold prices remain under pressure in Friday’s Asian trading session, amid a robust U.S. dollar and growing uncertainty over the Federal Reserve’s approach to interest rate reductions.
By 2:25 pm AEDT (3:25 am GMT) spot gold prices were up by $4.69 or 0.2% to US$2,569.27 per ounce.
Expectations of limited rate cuts in response to potential inflation, partially driven by fiscal policies under Donald Trump, have made gold less attractive as a non-yielding asset in a high-rate environment.
Market sentiment for gold is also affected by geopolitical risks, with ongoing tensions in the Middle East and the Ukraine-Russia conflict potentially bolstering safe-haven demand.
Investors now await key U.S. data releases on Friday, including the October retail sales report, the NY Empire State manufacturing index, and industrial production figures.
Additionally, Fed officials Susan Collins and John Williams are scheduled to speak, providing insights on future monetary policy.
The recent comments from Fed Chair Jerome Powell underscore a “remarkably good” US economic performance, suggesting that rate cuts will proceed cautiously.
Richmond Fed President Thomas Barkin echoed this sentiment, indicating that while progress has been made, further policy adjustments may be necessary to sustain momentum.
Meanwhile, the U.S. producer price index (PPI) rose 2.4% year-over-year in October, surpassing expectations, and initial jobless claims increased to 217,000 last week, slightly below forecasts.