Gold set for weekly loss on stronger dollar, rate-hike bets

Gold edged lower on Friday and was headed for ‌its second consecutive weekly loss, pressured by a stronger dollar and higher oil prices that boosted expectations of interest rate hikes by the U.S. Federal Reserve.

Spot gold was down 0.4% at $4,522.89 per ​ounce by 0222 GMT.

The metal was down about 0.3% for the ​week so far.

US gold futures for June delivery lost 0.4% to $4,524.40.

The ⁠dollar held near a six-week high, making greenback-priced bullion more expensive for holders of ​other currencies.

“What’s been driving (gold) lower has been the stronger dollar, which in turn is ​being elevated by ongoing high interest rates pretty much around the world,” said Edward Meir, an analyst at Marex.

U.S. Secretary of State Marco Rubio said there had been “some good signs” in talks ​with Iran, although Tehran’s uranium stockpile and control over the Strait of Hormuz remained sticking ​points.

Oil prices climbed as investors doubted the prospects of a breakthrough in U.S.-Iran peace talks.

Elevated oil ‌prices stoke ⁠inflation risks and fears of interest rates staying higher for longer. While gold is traditionally seen as a hedge against inflation, higher interest rates tend to weigh on the non-yielding metal.

Markets are pricing in a Fed rate hike before year-end, with ​a 60% chance of ​a move by ⁠December, according to CME Group’s FedWatch tool.

U.S. President Donald Trump will swear in Kevin Warsh as the Fed chair on Friday at the ​White House, the Trump administration said.

How businesses and consumers respond ​to ongoing ⁠economic shocks will determine if the Fed can “look through” current high inflation or needs to consider raising interest rates, Richmond Fed President Thomas Barkin said on Thursday.

Spot silver fell 0.7% ⁠to $76.18 per ​ounce, but was headed for a weekly gain ​of 0.4%. Platinum lost 1% to $1,945.97, and palladium fell 0.5% to $1,371.90, with both metals on course for a ​weekly loss.