Prices for gold were on track to fall for a third straight session on Friday, weighed by higher yields and a steady American dollar, but the bullion retained its spot over the key $2,000 level on expectations of interest rate cuts towards the end the year.
Spot gold was down 0.55% at $2,004.52 U.S. per ounce, and fell 0.6% for the week. U.S. gold futures fell 0.5% to $2,009.60.
Gold’s losses were limited due to concerns over the U.S. debt ceiling issue and lingering concerns about the country’s banking sector.
Safe-haven bullion tends to gain during times of economic or financial uncertainty.
There is a 90% chance of the U.S Federal Reserve holding rates at their current level in June.
Traders have reportedly practically priced in a 25-basis-point cut by September, while the bullish sentiment in the (gold) market still stands strong over expectations of the Fed cutting rates later this year.
U.S. Federal Reserve Governor Michelle Bowman, however, reiterated the central bank’s stance on raising rates if necessary to fight still-high inflation.
Higher rates weigh on gold, which bears no interest.
The dollar was up 0.1% and closed to more-than-a-week high from the last session, with the currency due to see its highest weekly rise since late February. With a stronger dollar, bullion gets more expensive for holders of other currencies.
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