Gold heads for weekly fall as fewer Fed rate cut prospects weigh
Gold prices fell on Friday and were on track for a weekly decline, as an overall stronger dollar and the prospect of fewer US interest rate cuts offset support from rising geopolitical risks in the Middle East.
Spot gold slipped 0.5% to $3,355.49 an ounce, as of 0245 GMT, and was down 2.2% for the week so far.
US gold futures shed 1% to $3,371.80.
'Right now there's a lot of fluid situation in the Middle East that causes traders not to take any aggressive position both on the long side and the short side of the trades of the spectrum,' said Kelvin Wong, a senior market analyst, Asia Pacific at OANDA.
The conflict in the Middle East intensified on Thursday when Israel bombed Iran's nuclear sites, while Iran fired missile and drone strikes on Israel, including an overnight attack on an Israeli hospital.
Neither side has signalled an exit strategy.
President Donald Trump will decide in the next two weeks whether the US will get involved in the Israel-Iran air war, the White House said on Thursday, raising pressure on Tehran to come to the negotiating table.
Meanwhile, Trump reiterated his calls for the Federal Reserve to cut interest rates, saying the rates should be 2.5 percentage points lower.
Gold little changed, platinum retreats from 10-year high
The Fed held rates steady on Wednesday, and policymakers retained projections for two quarter-point rate cuts this year.
'Macroeconomic developments, particularly steady yields and renewed USD strength, have not supported the (gold) price,' analysts at ANZ said in a note.
'Rising inflation expectations and the Fed's cautious stance have weighed on market expectations around the number of rate cuts this year.'
The dollar was set to log its biggest weekly rise in over a month on Friday.
A stronger greenback makes gold more expensive for other currency holders.
Elsewhere, spot silver slipped 1.6% to $35.82 per ounce, while palladium fell 0.7% to $1,042.92.
Platinum fell 1.5% to $1,287.47, but was heading for its third straight weekly rise.
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