Gold heads for weekly decline as dollar firms, Fed rate outlook weighs

Gold prices dipped on Friday, signaling potential for a weekly decline, as the dollar strengthened and expectations of prolonged higher interest rates by the US Federal Reserve increased. Spot gold fell by 0.2% to $4,270.40 per ounce, marking a loss of over 2% for the week. Meanwhile, the dollar was on track for a weekly gain, making metals priced in greenbacks costlier for holders of other currencies.

This development follows the Federal Reserve's decision to raise its benchmark interest rate by a quarter of a percentage point, with two Fed policymakers indicating further rate hikes may be necessary to curb inflation. Philadelphia Fed President Anna Paulson emphasized the priority of returning inflation to 2%, while also considering the impact on the labor market.

New claims for US unemployment benefits were near a 57-year low, indicating a robust labor market despite ongoing challenges from the Middle East conflict. In other precious metals news, silver declined by 0.5% to $63.58, platinum remained steady at $1,749.61, and palladium dropped by 1.3% to $1,257.70.