Gold Prices Weaken Amid Dollar Surge and U.S. Inflation Anticipation

Gold prices dipped lower as the dollar reached a near one-month high, with investors awaiting U.S. inflation data critical for Federal Reserve policy decisions. Spot gold fell 0.1% and saw a weekly drop of about 1%. U.S./China market closures impacted, while forecasts suggest gold may gain longer term.

Gold prices experienced a downturn on Friday, poised for a weekly decline, as the dollar approached a one-month high and investors anticipated U.S. inflation data crucial for determining future Federal Reserve policies.

Specifically, spot gold shed 0.1%, settling at $4,991.99 per ounce by 0416 GMT, marking a roughly 1% slide for the week. Meanwhile, U.S. gold futures for April delivery increased 0.3%, reaching $5,010.20. According to Brian Lan, Managing Director of GoldSilver Central, a partial consolidation in precious metals is occurring with a downward bias due to a stronger dollar.

In Asia, markets in Mainland China, Hong Kong, Singapore, and Taiwan remained closed for the Lunar New Year. The dollar, on track for its strongest weekly showing since October, benefited from robust economic data and a hawkish Fed stance. Investors now turn to the Personal Consumption Expenditure (PCE) data for December for clues on possible U.S. monetary policy shifts, with expectations for the Fed's first rate hike by June. Goldman Sachs forecasts gold prices reaching $5,400 by 2026, propelled by central bank and private investor activities.