Gold prices decline as hopes for a US interest rate cut recede

Gold continued its decline today, after positive economic data reduced expectations of an imminent cut in US interest rates, and the decline in geopolitical turmoil contributed to reducing demand for safe haven assets.

By 04:26 GMT, gold in spot transactions fell 0.4 percent to $4,598.52 per ounce.

But the precious metal is on its way to weekly gains of about two percent after hitting its highest level ever at $4,642.72 on Wednesday.

US gold futures for February delivery fell 0.5 percent to $4,601.80.

“The downward move (for gold) in general began when… the odds of the United States intervening in some way in the social unrest in Iran (decreased) … and we are receiving data from the United States, and all of this shows that there is no urgent need to lower interest rates,” said Kyle Rodda, an analyst at Capital.com.

The dollar is heading for gains for the third week after US Department of Labor data showed weekly unemployment claims falling by nine thousand to 198 thousand applications after adjusting for seasonal factors, which is below expectations of 215 thousand applications according to a Reuters poll.

The rise in the dollar makes metals priced in the US currency more expensive for holders of other currencies.

People inside Iran, contacted by Reuters on Wednesday and Thursday, said that the protests appeared to have subsided since Monday, and US President Donald Trump also adopted a less harsh tone regarding military intervention against Tehran.

As for other precious metals, silver fell in spot transactions by 1.8 percent to $90.70 per ounce, but it is heading for weekly gains of more than 13 percent after recording its highest level ever at $93.57 in the last session.

Platinum fell 2.8 percent to $2,342.14 an ounce, and palladium lost 2.3 percent to $1,759.07 an ounce, after hitting its lowest level in a week earlier.