Gold prices were little changed during Asian trade on Friday, remaining on track for weekly declines as robust United States economic data and a strengthening dollar continued to weigh on sentiment.
By 3:35 pm AEST (5:35 am GMT) spot gold was down just $2.21 or 0.1% lower at US$3,336.18 per ounce, and down 0.6% for the week so far.
Although the U.S. dollar eased 0.1% against major peers on Friday, it is still on course to notch a second consecutive weekly gain.
Gold has remained under pressure amid upbeat U.S. macroeconomic data, as retail sales in June rose by 0.6%, exceeding expectations and rebounding from a 0.9% drop in May.
Separately, initial jobless claims dropped to 221,000 in the week ending July 12, compared to forecasts of 235,000.
The data reinforced perceptions of resilience in the U.S. economy, bolstering the Federal Reserve’s cautious stance on rate cuts.
The CME FedWatch Tool indicates a 58.4% chance of a 25 basis point rate cut at the Fed's September meeting.
Still, some Fed officials remain open to policy easing in July. “It makes sense to cut the FOMC’s policy rate by 25 basis points two weeks from now,” said Fed Governor Christopher Waller, pointing to growing downside risks to the economy.
Gold, traditionally viewed as a safe-haven asset, tends to benefit from lower interest rates as they reduce the opportunity cost of holding non-yielding assets.
Investors are also keeping a close eye on international trade developments, as President Donald Trump widened the scope of tariffs in his ongoing trade dispute.
