Gold prices rose in Friday's session, but still headed for a week of decline as the USD climbed to a nearly-month high, while investors are waiting for important US inflation data to assess the upcoming monetary policy orientation of the US Federal Reserve (Fed).
Spot gold prices rose 0.4% to 5,032.95 in this afternoon's trading session, but still fell about 0.5% since the beginning of the week. US gold futures for April delivery rose 0.8% to 5,037.60 USD/ounce.
Precious metals are still attracting many investors and they continue to look for buying opportunities when prices adjust" - Mr. Brian Lan, CEO of GoldSilver Central, a physical gold and silver trader based in Singapore, said.
Central banks will continue to consider gold as an asset to hold," Mr. Lan added, in the context of geopolitical risks between the US and Iran still existing.
US President Donald Trump warned on Thursday that Iran must reach an agreement on its nuclear program, otherwise it will face "very terrible consequences", and set a deadline of 10 to 15 days. In response, Tehran threatened to retaliate against US bases in the region if attacked.
Goldman Sachs believes that the recent slowdown in central bank gold purchases due to increased price volatility is likely only temporary. The bank believes that the medium-term trend of gold prices is still upward, although it may be accompanied by high volatility.
US Personal Consumption Expenditure (PCE) data, an inflation measure prioritized by the Fed, is currently the focus of market attention to find more signals about monetary policy. Minutes of the Fed's January policy meeting released this week show that some policymakers are still open to raising interest rates if inflation remains high.
According to CME's FedWatch tool, traders have slightly downturned expectations about the possibility of the Fed cutting interest rates in June. Gold, a non-rotating asset, usually performs well in a low-interest environment.
Gold demand in India this week remained weak as price fluctuations made buyers cautious, while many other major centers in Asia, including China, closed for the Lunar New Year holiday.
On other precious metals markets, spot silver prices rose 0.6% to $78.83/ounce. Platinum prices rose 0.8% to $2,085.64/ounce, while palladium rose 0.4% to $1,691.62/ounce.
