New Delhi, May 30: Gold prices witnessed a weekly decline of 1.36 per cent amid a firm US dollar and growing expectations of continued interest rate tightening by the US Federal Reserve, which reduced investor demand for the safe-haven asset.
Market participants noted that the strengthening dollar made gold more expensive for holders of other currencies, thereby impacting global demand. In addition, expectations that the US Federal Reserve may maintain higher interest rates for a longer period continued to pressure non-yielding assets like gold.
Analysts observed that investor sentiment remained cautious throughout the week, with global financial markets closely tracking US economic indicators, inflation data, and central bank commentary. The prospect of sustained higher borrowing costs has further strengthened the appeal of interest-bearing assets, diverting flows away from precious metals.
Despite the weekly decline, gold continues to be viewed as a key hedge against long-term economic uncertainty, inflation risks, and geopolitical tensions. However, in the short term, price movements are expected to remain sensitive to macroeconomic developments, particularly monetary policy signals from the United States.
Market experts suggest that volatility in global currency markets and evolving interest rate expectations are likely to keep gold trading within a narrow range in the near term, with investors closely monitoring upcoming economic data releases for further direction.