(MENAFN) Gold prices faced their first weekly loss in six weeks, even though they saw a slight increase in the final trading session of the week, propelled by data indicating a rise in inflation rates in the United States. Spot gold prices registered a weekly decline of 2.26 percent, dropping to USD2,337.96 per ounce. This performance marked the most significant weekly downturn since December, a trend that emerged despite the absence of a significant escalation in the ongoing Middle East crisis.
The US personal consumption expenditures price index showed a 0.3 percent increase last month, aligning with market expectations. However, this development is unlikely to alter expectations that the US Federal Reserve will delay interest rate hikes until September. Consequently, US Treasury bond yields decreased following the release of the inflation data, rendering gold more appealing to investors seeking alternative assets.
It's worth noting that higher interest rates typically diminish the appeal of gold, which does not offer yields like interest-bearing assets. Consequently, the prospect of postponed interest rate adjustments by the Federal Reserve contributed to gold's slight uptick in the midst of its overall weekly decline.
In parallel with gold, silver prices also experienced a notable weekly drop of over 5 percent in spot transactions, declining to USD27.2 per ounce. This decline underscores the broader trend of precious metal prices facing downward pressure amidst evolving economic indicators and monetary policy expectations.
Despite the short-term fluctuations, gold and silver prices continue to be influenced by a complex interplay of factors, including inflationary pressures, monetary policy decisions, and geopolitical tensions. As investors navigate these dynamics, they remain vigilant for potential shifts in market sentiment and economic fundamentals that could impact precious metal prices in the weeks ahead.
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