Gold prices fell at the end of the week, pressured by rising U.S. Treasury yields and the Federal Reserve’s hawkish stance.
Gold Market Performance:
- Spot Gold slipped 0.7% to $2,614.40 per ounce.
- February Gold Futures dropped 0.9% to $2,630.36 per ounce.
Trading volumes for gold typically thin out, and prices remain subdued toward year-end as institutional traders and market participants close their books ahead of the holiday season.
Moreover, fewer economic data releases and major policy decisions at year-end reduce catalysts for significant price movements.
Impact of a Strong Dollar on Gold:
The yellow metal edged up 0.3% for the week, recovering slightly after a 1% loss the previous week. However, the strong U.S. dollar, bolstered by the Fed’s hawkish policy shift, continued to exert downward pressure on gold prices.
The U.S. Dollar Index was slightly lower on Friday, trimming overnight gains but remained near the two-year high it touched last week. Treasury yields climbed sharply, further pressuring gold.
A weaker dollar often supports gold prices by making the metal more attractive to buyers using other currencies.
Interest Rate Trends and Gold Prices:
Gold prices fell sharply after the Federal Reserve’s policy meeting suggested only two rate cuts in 2025, compared to previous expectations of four cuts.
Higher interest rates typically weigh on gold prices, as they make interest-bearing assets like bonds more appealing compared to non-yielding gold.
Performance of Other Precious Metals:
- Platinum Futures dropped 3.6% to $919.90 per ounce.
- Silver Futures slid 1.5% to $29.935 per ounce.
