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Gold slips on firmer dollar, heads for worst week since November

by WOOWinvest
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Gold slips on firmer dollar, heads for worst week since November

Gold fell on Friday as the dollar strengthened and was on track for its worst week in nearly four months as some safe-haven demand cooled due to Russia’s invasion of Ukraine.

Spot gold was down 0.5% at $1,932.20 an ounce at 1002 GMT. U.S. gold futures were down 0.5% at $1,933.10.

A stronger dollar hurt overseas buyers’ appetite for gold. [USD/]

“These (gold and dollar) are very volatile, headline-driven markets, so we could see more action in both directions throughout the day,” said Craig Erlam, senior market analyst at OANDA, adding that Russia Negotiations with Ukraine have made significant progress. Largely trailing gold’s weekly decline. [MKTS/GLOB]

Gold has lost about 2.7% so far this week, with investors initially expecting the Federal Reserve to raise interest rates sharply.

Higher interest rates tend to raise the opportunity cost of holding interest-free gold.

Gold prices recovered slightly after the Federal Reserve said it would raise borrowing costs as expected, while acknowledging challenges posed by soaring inflation.

“Gold will continue to be well supported. As demand for safe-haven and inflation hedges remains strong, we will likely see more and more buying on dips,” Erlam said.

Spot palladium rose 2.3% to $2,567.02 an ounce, but is expected to fall about 8.8% on a weekly basis as concerns about supplies from top producer Russia also eased.

Meanwhile, Matt Simpson, senior market analyst at City Index, said that China intends to deal with COVID-19 with minimal impact on the economy and people’s lives, and promises further stimulus, sending palladium bulls back to the negotiating table.

The move comes after platinum, palladium and the major metals fell to technical support levels after sharp gains, followed by multiple volatile price moves.

Spot silver fell 0.4% to $25.24 an ounce, while platinum gained 1.5% to $1,036.53.

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