Gold Prices Slip Amid Pressure from Rising Yields
Gold prices fell on Friday, ending the week lower, as Treasury yields rose following the US Federal Reserve’s hawkish tilt. The yellow metal settled at $2,614.40 per ounce, a decline of 0.9% from the previous day’s level. Despite setting to edge up 0.3% for the week, gold has struggled to gain momentum due to the strong dollar, which has been boosted by the Fed’s policy shift.
Typically, gold trading sees thin volumes and subdued prices towards the year-end, as many institutional traders and market participants close their books ahead of the holiday season. Additionally, the reduced flow of economic data releases and policy decisions during the year-end has reduced catalysts for significant price volatility.
A weaker dollar can boost gold prices, making the yellow metal more attractive to buyers using other currencies. However, the strong dollar has continued to put downward pressure on bullion. Gold had fallen sharply after the Fed’s policy meeting indicated only two more rate cuts in 2025, against previous expectations of four. Higher interest rates make gold less attractive compared to interest-bearing assets like bonds.
Other precious metals were also lower on Friday, with platinum down 3.6% to $919.90 an ounce and palladium down 1.5% to $29.935 an ounce. Copper prices, however, were higher after a Reuters report showed China’s leading copper smelters have set lower processing charge guidance for the first quarter of 2025 compared to this quarter, reflecting an ongoing shortage of copper concentrates.