An employee holds one kilogram gold bullion at the YLG Bullion International Co. headquarters in Bangkok, Thailand, on Dec. 22, 2023. - Photographer: Chalinee Thirasupa/Bloomberg
Gold edged down on Friday and was set for its worst week in more than three years, hurt by a stronger U.S. dollar amid expectations of fewer Federal Reserve rate cuts.
Spot gold was down 0.1% at $2,562.61 per ounce, as of 0554 GMT. It has fallen more than 4% so far in the week.
Bullion hit a two-month low in the previous session and has declined more than $220 from the record peak hit last month.
U.S. gold futures were down 0.2% at $2,567.10.
The U.S. dollar continued its relentless march higher this week following Donald Trump's election victory, making bullion more expensive for other currency holders.
Gold's weakness reflects expectations of a more restrictive U.S. monetary policy in 2025 under Trump, said Fawad Razaqzada, market analyst at Forex.com.
Higher interest rates increase the opportunity cost of holding bullion.
Fed Chair Jerome Powell said on Thursday steady economic growth, a strong job market, and persistent inflation justify caution in cutting rates quickly.
According to the CME Fedwatch tool, markets see a 59% chance of a 25-basis-point rate cut in December, down from 83% a day ago.
"While Powell's comments could cap gains for gold as we head into the new year, another turbulent term for President Trump could also see it attract safe-haven flows," said Matt Simpson, senior analyst at City Index.
With a quiet U.S. calendar next week, gold could rebound, potentially retesting $2,600 level, Simpson said.
Data on Thursday showed that U.S. producer prices picked up in October, adding to signs that progress towards lower inflation was stalling.
Investors are awaiting U.S. retail sales data, due at 1330 GMT, and comments from several Fed officials later in the day.
Spot silver fell 0.3% to $30.37 per ounce, platinum edged up 0.1% to $940.45 and palladium added 0.5% at $945.75. All three metals were on track for weekly falls. - Reuters
