Spot Gold hovered above a 1-week low on Friday and was on course for a third consecutive weekly loss, as the US Dollar surged to a one-year high, while hawkish signals from the Federal Reserve also pressured the yellow metal.
A firmer dollar makes dollar-priced Gold less appealing to international investors holding other currencies.
9 of the Federal Reserve’s 19 policy makers claimed interest rates would need to be raised this year.
“Gold’s rally on the back of the U.S.-Iran peace deal proved short-lived. The resurgent dollar, powered by the Fed’s newly hawkish tone under Kevin Warsh, has stolen the spotlight,” Tim Waterer, chief market analyst at KCM Trade, was quoted as saying by Reuters.
“The new chairman’s firm stance has effectively neutralised the geopolitical tailwind, reminding everyone that monetary policy still calls the shots.”
According to the CME Group’s FedWatch Tool, markets are now pricing in an 87% chance of a Fed rate hike in December, compared to 61% prior to the US central bank’s policy decision.
Spot Gold was last down 1.57% on the day to trade at $4,142.89 per troy ounce.
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