[BENGALURU] Gold prices eased on Friday (May 16) and were on track for their steepest weekly decline in six months, as a stronger US dollar and waning trade war concerns dampened its appeal as a safe-haven asset.
Spot gold was down 0.1 per cent at US$3,235.59 an ounce, as at 0027 GMT. Bullion lost more than 2 per cent so far this week, and on track for its their worst weekly performance since last November.
US gold futures rose 0.4 per cent to US$3,239.20.
The US dollar was up 0.4 per cent so far for the week, heading towards its fourth consecutive weekly gain. A stronger US dollar makes greenback-priced gold more expensive for overseas buyers.
Earlier this week, the US and China agreed to temporarily slash harsh reciprocal tariffs, de-escalating a trade war which sparked fears of global recession.
Meanwhile, data showed US producer prices unexpectedly fell in April, while retail sales growth slowed. Earlier this week, a report showed consumer prices rose less than expected in April.
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Federal Reserve governor Michael Barr said on Thursday the US economy is on solid footing with inflation heading to the central bank’s 2 per cent target, but trade policies have clouded the outlook.
Markets are pricing in 57 basis points of rate cuts this year, with the easing projected to start in September.
Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low-rate environment.
“While imminent concerns have eased, risks remain in terms of tariff implementation and the fact that even reduced tariffs pose inflation risks and could weigh on demand,” Suki Cooper, an analyst at Standard Chartered said in a note.
Spot silver eased 0.2 per cent to US$32.61 an ounce, platinum rose 0.3 per cent to US$992.55 and palladium lost 0.7 per cent to US$961.50. REUTERS
