Gold prices rose on Friday on technical buying, but were headed for a third consecutive weekly decline, pressured by a firm U.S. dollar and as a hawkish U.S. Federal Reserve dashed hopes for near-term interest rate cuts.
Spot gold rose 0.4% to $4,6,67.93 per ounce, rebounding from a near two-month low hit in the previous session. U.S. gold futures for April delivery rose 1.3% to $4,664.
However, bullion has lost over 6% so far this week. Spot gold has fallen more than 10% since the U.S.-Israeli strike on Iran on February 28.
The greenback has emerged as one of the clearest “safe-haven” winners, strengthening over 2% so far this month. Meanwhile, the Fed kept rates steady on Wednesday, echoing major developed market central banks, and indicated that inflation could rise.
Experts say, interest rate futures show traders see little chance of a Fed reduction this year,.
Gold is considered an inflation hedge, but high interest rates weigh on it by making yield-bearing assets more attractive, while a stronger dollar makes the bullion more expensive for holders of other currencies.
