Gold Declines as Dollar Strengthens Amid Fed’s Tightened Policies

By Gina Lee

Gold prices experienced a decline on Friday morning in Asia, remaining close to a three-month low as the U.S. dollar continued to gain strength, influenced by the Federal Reserve’s tightening measures.

Gold was trading down 0.02% to $1,824.17 by 11:07 PM ET (3:07 AM GMT), positioning it for a 3.2% loss for the week, marking the largest drop in two months.

Typically, gold and the dollar move in opposite directions, but the dollar edged down slightly on Friday morning, despite having surged to a 20-year high. Investor concerns regarding a potential recession stemming from the Fed’s monetary tightening have provided support for the dollar.

The benchmark interest rates saw a slight increase on Friday.

Fed Chair acknowledged the importance of stable prices, describing them as the "bedrock" of the economy. He indicated that the central bank’s efforts to control inflation would inevitably involve some hardship, highlighting that the worst scenario would be allowing prices to escalate further.

On the data front, economic reports released on Thursday indicated a month-on-month growth of 0.5% in April, which was a slowdown compared to March’s 1.6% increase, largely due to easing cost pressures in energy products.

Additionally, figures released on Thursday showed that jobless claims increased to 203,000 last week, surpassing the forecast of 195,000 and slightly higher than the previous week’s count of 202,000.

In the realm of other precious metals, silver rose by 0.5%, but it was on track for a fourth consecutive weekly decline. Platinum saw a rise of 0.8%, while palladium gained 1.4%, although both were also set for weekly losses.