Vicky McKeever writes:
Gold prices continued to decline on Friday, as a stronger dollar put pressure on the precious metal.
The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six major currencies, looked set to make a weekly gain. Given that gold tends to be priced in dollars, a stronger greenback makes the precious metal more expensive for foreign buyers.
Investors were also waiting for the release of the US PCE data, for signals on what this means for the direction of inflation and interest rates.
Gold is considered to act as a hedge against higher inflation, but if stubborn inflation prompts the US Federal Reserve to keep rates higher for longer, this could weaken the appeal of bullion as a non-yielding asset.
According to a Reuters report, IG market strategist Yeap Jun Rong, said: “While gold is deemed as a safe-haven, the uncertainty on the trade front may still see profit-taking activities extend further, amid a stronger U.S. dollar.”