Gold on track for third weekly loss on firm dollar, hawkish Fed signals

Synopsis

Gold prices dipped on Friday, heading for a third consecutive weekly loss, pressured by a strengthening dollar and hawkish signals from the U.S. Federal Reserve. The Fed's projections indicate a potential rate hike this year, impacting the non-yielding metal. Meanwhile, Goldman Sachs forecasts gold to reach $4,900 by December.

Gold prices edged lower on Friday and were on track for a third consecutive weekly decline, as a stronger dollar and hawkish signals from the U.S. Federal Reserve weighed on the non-yielding metal.

FUNDAMENTALS

* Spot gold was down 0.5% at $4,189.26 per ounce, as of 0043 GMT. U.S. gold futures for August delivery ‌fell 0.9% ⁠to $4,207.80.

* ⁠The dollar hovered around a one-year high, making greenback-priced bullion more expensive for other currency holders. [USD/]

* Oil tankers sailed through the Strait of Hormuz and the United States said it lifted its blockade on Iran on Thursday as an interim deal to end the war took effect, though key issues are still unresolved between the two countries.

* Inflationary ⁠pressures stemming ‌from the Iran war are becoming too strong for central banks worldwide to ignore. A growing number, led by the ⁠U.S. Federal Reserve, have either raised borrowing costs or signalled imminent moves to tame price growth.

* Nine of the U.S. central bank's 19 policymakers now believe they will need to raise the policy rate this year, according to projections published on Wednesday after the Fed announced its decision to leave the policy rate in its current 3.50%-3.75% range in Kevin Warsh's debut ‌policy meeting as chairman.

* Goldman Sachs expects gold prices to rise to $4,900 per ounce by December, lower than its earlier forecast of $5,400, as the bank ⁠doesn't expect a Fed rate cut this year anymore.

* Meanwhile, Dubai's commodities exchange CEO told Reuters that it will launch a same-day settlement gold futures contract on Monday, aiming to tap safe-haven demand and faster trading infrastructure to boost liquidity in the emirate's bullion market.

* Spot silver fell 0.8% to $65.32 per ounce, platinum lost 0.9% to $1,680.87, and palladium was down 0.5% at $1,272.

DATA/EVENTS (GMT)

0600 UK Retails Sales MM, YY May

0600 UK Retail Sales Ex-Fuel MM May

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