Kampala: Gold prices rose slightly on Friday but were still heading for a weekly loss as a stronger US dollar and uncertainty over interest rates reduced investor appetite for the precious metal.
Spot gold moved higher during the day while US gold futures also recorded gains. Despite the rebound, bullion remained on track for a modest weekly decline as currency strength and monetary policy concerns dominated market sentiment.
The US dollar climbed to near a one month high, making gold more expensive for buyers using other currencies and weakening demand. A stronger dollar often pressures gold because the metal is priced in the US currency.
Investors are closely watching upcoming US inflation data, especially the Personal Consumption Expenditures index, which is the Federal Reserve’s preferred measure. Recent Federal Reserve meeting minutes indicated that policymakers remain cautious and may keep interest rates high for longer if inflation stays elevated. Higher interest rates tend to reduce gold’s appeal because the metal does not provide interest income.
Demand from major Asian markets also remained subdued. Buying in India was reported to be weak, while trading activity in China slowed due to the Lunar New Year holidays.
However, gold’s losses were limited by continued safe haven demand. Ongoing geopolitical tensions and global economic uncertainty encouraged some investors to hold gold as a protective asset. Rising oil prices and cautious global markets also supported this demand.
Other precious metals moved higher, with silver, platinum and palladium posting modest gains during the session.
Market analysts say gold may remain volatile in the near term as investors await fresh economic data and signals from the Federal Reserve. Over the longer term, continued geopolitical risks, central bank purchases and inflation concerns are expected to support prices.