Gold loses its luster with the strength of dollar and economic concerns curb losses

Gold prices fell on Friday as the dollar rose, but continued economic concerns and a standoff over the US debt ceiling capped losses for the yellow metal.

By 0301 GMT, spot gold fell 0.3 percent to $2,010.29 an ounce, down 0.3 percent for the week. US gold futures fell 0.3 percent to $2,015.00.

Brian Lane, managing director at Gold Silver Central, said that while investors view the uncertainties surrounding US debt ceiling talks and expect a pause in US rate hikes, there appears to be a modicum of profit-taking driving prices lower.

Gold rose on Thursday after data showed a jump in weekly jobless claims in the United States and an annual increase in producer prices last month at the slowest pace in more than two years, but the yellow metal lost its luster as the dollar rose, which makes gold more expensive for buyers abroad.

Meanwhile, a White House spokesperson said Thursday that a meeting scheduled for Friday on the debt ceiling between President Joe Biden and top lawmakers had been postponed, and the two sides agreed to meet next week.

Gold tends to gain during times of economic or financial uncertainty as a safe haven, while low interest rates also increase demand for non-yielding assets.

Markets are now factoring in a 92.8 percent chance that the Federal Reserve will keep interest rates at their current level in June.

As for other precious metals, spot silver fell 0.8 percent to $23.98 an ounce. Platinum fell 1 percent to $1,083.24.

Palladium rose 0.5 percent to $1,558.50.