FX.co ★ Gold Extends Losses for 2nd Week

Gold experienced a decline of over 1.5%, settling below $3,270 per ounce on Friday, and is poised for a 3% decrease over the week—marking its second consecutive weekly decline. The drop in gold prices can be attributed to diminished demand for safe-haven assets due to easing geopolitical tensions and positive developments in global trade. A precarious ceasefire between Israel and Iran has been maintained, while US Commerce Secretary Howard Lutnick announced that trade agreements with China and other major partners are on the verge of finalization, fostering an optimistic market sentiment. Additionally, US economic data indicated a slight rise in the core PCE index above predictions, though it remains indicative of moderate inflation, which has elevated prospects for Federal Reserve interest rate cuts later in the year. Consumer sentiment soared to its highest point in four months, accompanied by improved inflation expectations. Even with the recent downturn, gold has appreciated by over 25% since the beginning of the year and is approximately $200 short of its April peak, sustained by robust central bank purchases and the anticipated easing of Fed's monetary policy.