Pablo Sinha
Feb 20 (Reuters) – Gold prices edged lower on Friday, heading for a weekly loss, as the dollar climbed to near one-month highs, while investors awaited key U.S. inflation data to assess the Federal Reserve’s future monetary policy.
Spot gold was down 0.1% at $4,991.99 an ounce as of 0416 GMT, having fallen about 1% so far this week. U.S. gold futures for April delivery rose 0.3% to $5,010.20.
“Precious metals are consolidating right now with a slight downward bias… We’re seeing the U.S. dollar come back off the lows and that’s putting some pressure on precious metals,” said Brian Lan, central managing director at GoldSilver.
“Even during periods when there was no Chinese market supporting gold, we saw prices more or less remain stable, which also tells you that there is still a lot of gold buying at lower levels.”
Markets in China, Hong Kong, Singapore and Taiwan were closed for the Lunar New Year holiday.
The dollar was on track for its strongest week since October, supported by a slew of stronger-than-expected economic data, a more hawkish outlook from the Federal Reserve and lingering tensions between the United States and Iran. [USD/]
December personal consumption expenditures (PCE) data, the Fed’s preferred inflation gauge, is now in focus for clues about U.S. monetary policy.
According to CME’s FedWatch tool, markets currently expect the Federal Reserve to announce its first rate announcement of the year in June. [FEDWATCH]
Gold, which has no yield, tends to perform well in low interest rate environments.
In a base case, Goldman Sachs said in a report that it expects central bank buying to reaccelerate, while private investors will only increase exposure in response to the Federal Reserve cutting interest rates, pushing gold prices to $5,400 per troy ounce by the end of 2026.
It also said it still believes the medium-term trajectory for gold prices is upward, potentially leading to increased volatility.
Elsewhere, spot silver fell 0.6% to $77.88 an ounce. Spot platinum edged down 0.3% to $2,063.63 an ounce, while palladium fell 0.4% to $1,677.71 an ounce.
(Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
