Gold prices recorded a decline today, Friday, and are headed for a weekly decrease, pressured by rising dollar values and increasing expectations that the Federal Reserve (the US central bank) will keep interest rates high for a longer period in order to combat inflation.
Spot gold fell 0.2 percent to $4,270.40 per ounce, and has dropped more than two percent since the beginning of the week. US gold futures increased 0.2 percent to $4,304.80.
The dollar is headed for weekly gains, making dollar-denominated metals more expensive for holders of other currencies.
Two policymakers at the US central bank indicated that the bank will likely have to raise rates again to curb unacceptably high inflation. This comes after the bank raised rates by a quarter percentage point last week.
Although gold is typically seen as a hedge during periods of high inflation, rising interest rates dampen demand for it since they enhance the appeal of income-generating assets.
Data showed that new unemployment claims in the United States remained close last week to their lowest level in 57 years, indicating that the labor market has regained momentum after struggling for most of the summer and is overcoming the adverse factors stemming from the Middle East conflict.
Informed sources stated that American and Iranian negotiators in New York are exploring a gradual path to end the war, involving Iran reopening the Strait of Hormuz and Washington lifting the economic blockade imposed on Iran.
For other precious metals, silver fell in spot transactions by 0.5 percent to $63.58, platinum remained at $1,749.61, and palladium declined by 1.3 percent to $1,257.70.