Gold Falls, Set to Close Its Worst Week in Over Three Years

Gold prices retreated on Friday, heading for their worst week in more than three years, pressured by a stronger U.S. dollar amid expectations of fewer rate cuts from the Federal Reserve.

Spot gold dipped 0.1%, trading at $2,562.61 per ounce, having lost more than 4% this week.

The precious metal hit a two-month low in the previous session, declining over $220 from its all-time high reached last month. U.S. gold futures were down 0.2%, trading at $2,567.10.

The U.S. dollar continued its relentless climb this week following Donald Trump’s election victory, making gold more expensive for holders of other currencies.

Gold’s weakness reflects expectations of a more hawkish U.S. monetary policy in 2025 under Trump’s administration, according to Fawad Razaqzada, a market analyst at Forex.com. Higher interest rates increase the opportunity cost of holding non-yielding bullion.

Federal Reserve Chair Jerome Powell stated on Thursday that steady economic growth, a strong labor market, and persistent inflation justify caution in swiftly cutting rates.

According to the CME’s FedWatch tool, markets are currently pricing in a 59% probability of a 25 basis point rate cut in December, down from 83% just a day earlier.