Gold prices rise as dollar comes off six-mth peak, but outlook dim
Investing.com-- Gold prices rose slightly on Friday, taking some relief as the dollar retreated from a six-month high, although the prospect of higher-for-longer interest rates, following a hawkish stance from the Federal Reserve, presented a weak outlook.
The yellow metal was also set for a muted weekly performance, having caught few bids amid growing concerns over rising interest rates.
Gold futures in particular saw wild swings this week as markets adjusted their outlook for the yellow metal in the face of higher U.S. rates.
The most-trade gold futures contract on the Comex, expiring in December, rose 0.2% on Friday to $1,943.44 an ounce by 00:52 ET (04:52 GMT). The contract was down 0.1% this week.
Spot gold rose 0.2% to $1,924.26 an ounce, and was set to end the week unchanged.
Gold prices saw some relief as the dollar fell from six-month highs in overnight trade. But the greenback still remained relatively well-bid, amid expectations of higher U.S. interest rates.
The Fed kept rates steady this week, but warned that sticky inflation could invite at least one more hike this year.
The central bank also said it will likely leave rates above 5% through 2024, disappointing market expectations for at least four rate cuts next year.
The prospect of higher for longer rates presents more headwinds to gold, given that it increases the opportunity cost of investing in non-yielding assets. This trend had battered gold through the past year, and presents little upside for the yellow metal.
Still, bullion may benefit from some near-term safe haven demand, especially amid growing concerns over a U.S. government shutdown. While historically, gold has seen little love during past shutdowns, it could still see some bids if
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