Gold Set for Second Weekly Loss as Strong Dollar and Higher Bond Yields Pressure Prices

Gold prices are heading for their second consecutive weekly decline, as investors reassess expectations for interest-rate cuts and react to a stronger U.S. dollar and rising bond yields. Despite a slight uptick on Friday, the precious metal remained under pressure during the week. One of the key reasons behind the decline is the reduced expectation of near-term rate cuts by the U.S. Federal Reserve. Higher interest rates generally reduce the appeal of gold because it is a non-yielding asset, making interest-bearing investments like bonds more attractive. At the same time, the U.S. dollar strengthened and Treasury yields increased, which further weighed on gold prices. A stronger dollar makes gold more expensive for investors holding other currencies, often reducing demand for the metal. Global geopolitical tensions and surging oil prices have also created volatility across financial markets. Some investors have been selling gold to cover losses in other assets such as equities amid market turbulence. Analysts believe gold prices may remain volatile in the near term as investors closely watch U.S. inflation data and Federal Reserve policy signals, which will play a crucial role in shaping the outlook for interest rates and precious metals.