Gold prices are set for their first quarterly decline in three on Friday as expectations of more interest rate hikes by the U.S. Federal Reserve and its global peers dimmed the outlook for the shiny yellow metal.
Spot gold was down 0.2% to $1,904.67 U.S. per ounce, down 3.3% for the quarter ending June 30. U.S. gold futures shed 0.2% to $1,913.10.
Gold briefly dropped below the key $1,900 level on Thursday for the first time since mid-March, as a slew of data through the week painted a picture of a resilient U.S. economy and cemented bets for more policy tightening.
Most U.S. central bank policymakers expect they will need to raise interest rates at least twice more by the year’s end, Fed Chair Jerome Powell said.
Interest rate hikes weigh on gold because they tend to lift bond yields and in turn raise the opportunity cost of holding non-yielding bullion.
Market participants are now awaiting personal consumption expenditures (PCE) data for May later in the day, with core PCE expected to be 4.7% on a year-on-year basis, well above the Fed’s 2% target.
