Gold prices declined for a fourth consecutive session on Friday, pressured by stronger U.S. economic data that lifted the dollar and weakened expectations for near-term Federal Reserve rate cuts. Investors also remained focused on talks between U.S. President Donald Trump and Chinese President Xi Jinping.
Spot gold fell 1.6% to $4,578.74 an ounce by 03:05 ET, or 07:05 GMT, while U.S. gold futures dropped 2.1% to $4,585.87 an ounce.
For the week, bullion was down about 3%.
Other precious metals also weakened. Silver fell 5.2% to $79.13 an ounce, while platinum declined 2.3% to $2,013.46 an ounce.
U.S. Dollar Gains After Strong Economic Readings
The U.S. Dollar Index rose 0.3% in Asian trading, reaching a two-week high and putting it on track for a weekly gain of more than 1%.
A run of stronger-than-expected U.S. data this week reinforced concerns that inflation remains elevated, especially as oil prices surged on Middle East tensions. A stronger dollar typically weighs on gold by making it more expensive for buyers using other currencies.
Figures released this week showed U.S. producer prices recorded their largest annual increase in four years in April, while consumer inflation also came in hotter than expected. Retail sales data pointed to resilient consumer spending despite rising energy costs.
As a result, traders reduced expectations for Federal Reserve rate cuts this year, with some investors beginning to consider the possibility of further tightening.
Gold is often used as a hedge against inflation and geopolitical risk, but it generally becomes less attractive when interest rates rise because it pays no yield.
Trump-Xi Talks End Without Major Breakthrough
Investors closely watched the Beijing summit between Trump and Xi for signals on U.S.-China trade relations and the conflict involving Iran. Both sides described the talks as constructive, but no major policy breakthrough was announced after the meeting ended.
Chinese state media said the two sides had reached “important consensus” on preserving stable economic and trade relations and agreed to strengthen coordination on international matters.
Trump had earlier said the relationship between the U.S. and China was “very strong” and said Xi had offered help regarding Iran and the Strait of Hormuz situation. China also called for the reopening of Hormuz and urged dialogue to ease tensions in the Middle East.
Gold faced additional pressure after Trump wrote in a Truth Social post that “the military decimation of Iran (to be continued!).” The comment underscored the risk of further escalation in the Iran war.
Higher oil prices linked to disruption in the Strait of Hormuz have complicated the outlook for gold by raising concerns that inflationary pressure could remain elevated globally.
Benchmark copper futures on the London Metal Exchange fell 2.6% to $13,644.22 a ton, while U.S. copper futures declined 3.1% to $6.37 a pound.