Gold Prices Extend Weekly Decline
Gold prices moved lower during Asian trading on Friday and headed toward a third consecutive weekly loss. A stronger US dollar and the Federal Reserve’s hawkish interest-rate outlook outweighed support from the interim peace agreement between the United States and Iran.
Spot gold declined by 1.8% to $4,134.86 per ounce. Meanwhile, US gold futures for August fell by 2.2% to $4,152.25.
Gold was on course to record a weekly decline of approximately 2%.
Hawkish Federal Reserve Pressures Gold
Gold prices had risen sharply at the beginning of the week as investors welcomed progress toward a US-Iran peace agreement. However, those gains faded following the Federal Reserve’s latest policy meeting.
Nine of the Fed’s 19 policymakers expect at least one interest-rate increase later this year. This strengthened expectations that borrowing costs could remain elevated for longer.
The Federal Reserve left rates unchanged on Wednesday. However, comments from Chair Kevin Warsh were interpreted as hawkish by financial markets.
The policy outlook pushed US Treasury yields higher and lifted the dollar to its strongest level in more than a year.
Stronger Dollar Reduces Bullion Demand
The US Dollar Index remained largely unchanged during Asian trading after gaining 0.8% on Thursday. The previous session’s advance took the index to its highest level since May 2025.
A stronger dollar makes gold more expensive for buyers using other currencies. At the same time, higher interest rates increase the opportunity cost of holding non-yielding assets such as bullion.
Futures markets were pricing in a probability of more than 80% that the Federal Reserve would raise interest rates before the end of the year.
US-Iran Talks Face New Uncertainty
Gold’s decline deepened after Switzerland announced that negotiations over a final agreement to end the Middle East conflict would not take place on Friday.
US Vice President JD Vance reportedly suspended the planned Geneva talks. The decision raised fresh doubts about whether the recently announced interim US-Iran agreement would remain in place.
The agreement is expected to support the reopening of shipping routes through the Strait of Hormuz. Optimism surrounding the deal had contributed to a sharp decline in oil prices earlier in the week.
However, oil prices rebounded on Friday, renewing concerns about inflation and its potential impact on monetary policy.
Silver, Platinum and Copper Prices Fall
Other precious and industrial metals also traded lower.
Silver prices dropped by 2.5% to $64.09 per ounce, while platinum declined by 1.4% to $1,674.51 per ounce.
Benchmark copper futures on the London Metal Exchange fell by 0.9% to $13,582.33 per tonne. US copper futures also declined by 1% to $6.30 per pound.
