Gold is on its way to record its second weekly decline

Gold prices are heading for a decline for the second week, affected by the rise in the dollar and Treasury bond yields after statements by the Chairman of the Federal Reserve (the US Central Bank) that tend toward monetary tightening.

According to Reuters, by 0351 GMT on Friday, gold settled in spot transactions at $1,959.74 per ounce, after falling to its lowest levels since October 18 on Thursday. US gold futures fell 0.3% to $1,964.50.

Gold is also heading to record its worst weekly performance in more than a month, as it has fallen 1.6% since the beginning of the week.

Federal Reserve officials, including Chairman Jerome Powell, said on Thursday that they are still not confident that interest rates are high enough to end the battle with inflation. This shook the market’s expectations that US interest rates would reach their peak.

After Powell’s comments, 10-year US Treasury bond yields rose from their lowest levels in more than a month, making the non-yielding yellow metal less attractive to investors.

Traders now expect the first possible US Central interest rate cut to be in June next year, instead of previous expectations of a cut in May. High interest also increases the opportunity cost of holding gold

At the same time, the dollar index is on track to record its best week in two months, making gold more expensive for holders of other currencies.

As for other precious metals, palladium fell 1.3% to $979.43 per ounce, which is its lowest level since 2018, and is on track to record the worst week in 11 months.

Platinum fell 0.2% to $857.61 and is heading for its worst weekly performance since the week ending June 18, 2021. Silver rose 0.4% to $22.72.

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