Gold Holds Steady but Set for Weekly Loss Amid Dollar Strength and Fed Outlook

Gold prices remained steady on Friday, but the precious metal is on track for its third consecutive weekly decline, pressured by a stronger US dollar and reduced expectations for interest rate cuts by the Federal Reserve. At the same time, concerns over escalating US tariffs provided some support to the market.

As of 12:34 p.m. Saudi time, spot gold held firm at $3,293.56 per ounce. However, bullion has declined by 1.4% over the course of the week. US gold futures also edged lower, down 0.1% to $3,344.60 per ounce.

The dollar index climbed to its highest level since late May, making gold more expensive for holders of other currencies. Analysts say the greenback’s strength and shifting interest rate expectations are dampening investor appetite for gold, which typically thrives in low-rate environments.

“Gold remains weighed by reduced bets for Fed rate cuts for the rest of 2025,” said Han Tan, chief market analyst at Nemo.Money. “This week’s US GDP data, jobless claims, and the Personal Consumption Expenditures (PCE) index all reinforced the Fed’s reluctance to pivot on rates.”

The Federal Reserve held its benchmark interest rates steady in the 4.25% to 4.5% range during its latest policy meeting, dashing hopes for a potential rate cut as early as September.

Meanwhile, market focus turned to the broader global trade environment after US President Donald Trump announced sweeping new tariffs on exports from several key partners, including Canada, Brazil, India, and Taiwan. The move, part of a wider plan to reshape global trade dynamics, has added uncertainty to the economic outlook.

“The precious metal should, however, remain supported amid the still-uncertain impact from US tariffs on global economic growth,” Tan noted.

Recent US inflation data for June indicated that the new tariffs have already begun driving up the cost of certain goods, further complicating the Federal Reserve’s balancing act between inflation and economic growth.

Attention now shifts to the US jobs report, due later on Friday, which is expected to show a slowdown in job creation and a slight rise in the unemployment rate to 4.2%. The figures will offer further clues about the Fed’s next steps.

Elsewhere in the precious metals market, spot silver fell 0.8% to $36.46 per ounce, platinum dropped 1.7% to $1,268.45, and palladium slipped 0.5% to $1,185.19. All three metals are also headed for weekly losses.

Despite recent price declines, gold’s role as a safe-haven asset may continue to attract buyers amid rising economic and geopolitical uncertainty. Physical demand in Asia picked up slightly this week due to the dip in prices, although volatility kept some investors on the sidelines.