US gold futures ease, dollar index rises ahead of inflation data

Anushree Mukherjee
| Reuters

Gold prices eased on Friday, and were set to post their biggest weekly drop since November 2024, on a stronger dollar, while investors awaited a key U.S. inflation data for cues into the Federal Reserve’s monetary policy trajectory.

Spot gold XAU= fell 0.5% to $2,862.05 an ounce as of 0719 GMT.

Bullion shed 2.5% so far this week, after logging eight straight weeks of gains. However, prices rose 2.2% in February.

U.S. gold futures GCcv1 eased 0.8% to $2,873.80.

The dollar index .DXY was set for a weekly gain of 0.7%, making greenback-priced gold more expensive for foreign buyers. USD/

“While gold is deemed as a safe-haven, the uncertainty on the trade front may still see profit-taking activities extend further amid a stronger U.S. dollar,” said IG market strategist Yeap Jun Rong.

U.S. President Donald Trump said on Thursday his proposed 25% tariffs on Mexican and Canadian goods will take effect on March 4 along with an extra 10% duty on Chinese imports as deadly drugs continue to pour into the U.S. from those countries.

Gold is seen as a hedge against political risks and inflation, but higher interest rates dampen the non-yielding asset’s appeal.

Investors now await the Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation measure, due at 1330 GMT.

“I do not think rate pricing will see any significant shift, with several components in the CPI and PPI suggesting that the PCE inflation could remain under control and hence, may not sway rate expectations as much,” Yeap said.

Philadelphia Federal Reserve Bank President Patrick Harker on Thursday expressed support for continuing to hold short-term borrowing costs in the current range of 4.25%-4.50%.

Spot silver XAG= fell 0.4% to $31.12 an ounce, platinum XPT= lost 0.3% to $945.80 and palladium XPD= slipped 0.5% to $914.81. All three metals are down for the month so far.

Reporting by Anushree Mukherjee in Bengaluru; Editing by Rashmi Aich, Eileen Soreng and Sumana Nandy