Gold is heading for its worst weekly performance in 3 years.. Why? | economy

Gold prices are heading today, Friday, to record the worst weekly performance in more than 3 years due to the rise of the dollar as a result of expectations of smaller US interest rate cuts, which reduced the appeal of the yellow metal among investors.

Gold rose in instant transactions by 0.3% to $2,572.4 per ounce by 16:13 GMT, but it fell again during today’s trading.

US gold futures also fell by 0.2% at $2,567.

The precious metal had fallen by more than 4% since the beginning of the week, and yesterday, Thursday, it touched the lowest level since last September 12.

What are the reasons?

• The dollar is on track for its biggest weekly gain in more than a month, making gold more expensive for holders of other currencies.
• US Treasury bond yields also continued their gains today Friday after data showed retail sales rose in the largest The world’s economy rose more than expected last month.
• High interest rates increase the opportunity cost of holding non-yielding gold.

How is inflation affected?

Economists believe that President-elect Donald Trump’s tariff plans will stoke inflation, which could slow the Federal Reserve’s monetary easing cycle.

Federal Reserve Chairman Jerome Powell said yesterday, Thursday, that there is no need to rush to cut rates.

According to CME’s Fed Watch tool, markets expect 59% to cut interest rates by 25 basis points next December, down from 83% the day before.

Investors are now awaiting comments from a number of Federal Reserve officials later on Friday.

Despite the downward trend in gold, investors expect that the US government under Trump will reduce taxes and raise customs duties.

Such a combination would push US debt and inflation higher, both things that could help the price of gold.

What about the rest of the minerals?

For other precious metals:

• Silver rose in spot transactions 0.6% to $30.63 per ounce.
• Platinum rose 0.7% to $946.31.
• Palladium increased 1.6% to $955.80. The three metals are heading for a weekly decline.