Gold is Heading to Record The Largest Weekly Jump in 6 Months

Gold prices fell on Friday, under pressure from the strength of the dollar, but it is heading towards recording the largest weekly jump in 6 months, as concerns about the rise in consumer prices in the United States led to the demand for the yellow metal as a hedge in the face of inflation.

In spot transactions, gold fell 0.3% to $ 1856.20 an ounce after jumping to a 5-month peak on Wednesday. US gold futures fell 0.3% to $1,857.90.

The dollar index rose to its highest level since July 2020, putting pressure on gold by increasing its cost to buyers of other currencies.

But the yellow metal is still on track to record the largest weekly gain since May 7, after consumer prices in the United States last month recorded the highest jump in one year in 30 years.

The sharp rise in inflation has prompted investors to increase bets that the Federal Reserve will raise interest rates sooner than expected.

Raising interest rates will likely reduce the attractiveness of gold, as higher interest increases the opportunity cost of non-yielding yellow metal holders.

As for other precious metals, silver lost 0.5% in spot transactions to $25.10 an ounce, but it is on its way to recording the best week in three weeks.

Platinum fell 0.4% to $ 1081.90 an ounce, but it is on track to achieve the largest weekly increase in a month. And palladium fell 0.5% to $ 2048.91 an ounce.