Gold prices slipped on Friday, but were on track for a fourth straight weekly gain as expectations that the Federal Reserve will cut interest rates in September lifted bullion’s appeal. Spot gold fell 0.8% to $2,424.34 per ounce by 0231 GMT.
It has risen 0.7% so far this week, hitting an all-time high of $2,483.60 on Wednesday.
US gold futures fell 1.2% to $2,426.10. Pressuring bullion, the US dollar inched higher 0.1% on Friday and benchmark 10-year Treasury yields also drifted higher.
Gold is currently seeing some profit-taking, but things look positive in the medium-term amid political uncertainty and as rate cuts approach, said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.
Markets see a 98% chance of a Fed rate cut in September, according to the CME FedWatch Tool.
Non-yielding bullion’s appeal tends to shine in a low-interest rate environment. Earlier this week, Fed Chair Jerome Powell said recent inflation readings “add somewhat to confidence” that the pace of price increases is returning to the central bank’s target in a sustainable fashion, suggesting a turn to rate cuts may not be far off.
Meanwhile, Federal Reserve Bank of San Francisco President Mary Daly said on Thursday, “we don’t have price stability right now”.
“Official announcement of the Fed’s easing of monetary policy is expected to further boost gold prices.
Consequently, prices could potentially reach a record $3,000 by autumn 2024,“ said Julia Khandoshko, CEO at European broker Mind Money.
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Elsewhere, Swiss June gold exports fell to the lowest level since April 2022 owing to reduced shipments to China and India, customs data showed.
Among other metals, spot silver fell 1.8% to $29.54 per ounce, platinum eased 0.5% to $962.65 and palladium dropped 0.4% to $926.50.
All three metals were headed for weekly declines.
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