Gold prices edged higher on Friday amid technical buying but faced pressure for a third consecutive weekly decline, driven by a strong U.S. dollar and a hawkish Federal Reserve stance that dampened expectations of near-term interest rate cuts. Spot gold rose 0.4% to $4,667.93 per ounce, rebounding from a near two-month low hit the previous day. U.S. gold futures for April delivery climbed 1.3% to $4,664. Analysts noted that gold held key technical support levels in the weekly timeframe, with some predicting a potential recovery to the level where the price had previously broken down, around $4,800. Nicholas Frappell, global head of institutional markets at ABC Refinery, highlighted this possibility. However, the metal had already lost over 6% this week, with spot gold falling more than 10% since the U.S.-Israeli strike on Iran on February 28. The U.S. dollar emerged as a dominant "safe-haven" asset, gaining over 2% this month. The Federal Reserve maintained its benchmark interest rates steady on Wednesday, aligning with major developed market central banks, and signaled that inflation could rise. Interest rate futures indicated minimal chances of a Fed rate cut this year, according to the CME’s FedWatch tool. Gold is traditionally viewed as an inflation hedge, but high interest rates weigh on its appeal by making yield-bearing assets more attractive. A stronger dollar further pressures gold by increasing its cost for holders of other currencies. Frappell noted that after underperforming during the Middle East conflict, investors were inclined to sell gold rather than buy it, awaiting confirmation for their positions. Meanwhile, oil prices remained above $105 a barrel after touching $119 on Thursday, following Iran’s attacks on energy targets in the Middle East.#iran #federal_reserve #u_s_dollar #nick_frappell #abc_refinery
