Gold posts worst weekly performance in more than 5 months as dollar rises

Gold prices fell on Friday, recording their biggest weekly decline in more than five months, weighed down by a stronger dollar as investors assessed the impact of Donald Trump’s return to the US presidency and the implications of the US Federal Reserve’s interest rate cut.

Spot gold fell 0.8% to $2,684.03 an ounce, down 1.8% since the start of the week. US gold futures lost 0.4% to settle at $2,694.80.

The dollar index rose 0.6%, recording weekly gains.

The US Federal Reserve cut interest rates by 25 basis points on Thursday, but signaled a cautious approach to further monetary easing.

Trump’s victory raised questions about whether the US Federal Reserve would proceed with interest rate cuts at a slower pace and at a lower rate in light of the president-elect’s pledged tariff policy.

Fed Chairman Jerome Powell said the results of the presidential election would have no impact on monetary policy in the “near term”.

Gold is a hedge against inflation, but higher interest rates are making the non-yielding metal less attractive.

“If markets regain the possibility of a rate cut before the end of the year… that would help keep spot gold above $2,700,” said Han Tan, chief market analyst at Exinity Group.

In other precious metals, spot silver fell 2.4% to $31.22 an ounce.

Platinum fell 2.9% to $968.04. Palladium fell 3.5% to $988.80. All three metals posted weekly losses.