Gold prices edged lower on Friday as a stronger U.S. dollar pressured the market, prompting investors to take profits after bullion reached record highs earlier in the week.
U.S. gold futures slipped 0.2% to $3,038.20 per ounce, yet the metal remained on track for a third consecutive weekly gain, having risen 1.2% so far. On Thursday, it reached an all-time high of $3,065.20.
"Gold is undergoing a healthy correction after surging past the $3,000 mark, with the dollar’s strength adding to the downward pressure," said Han Tan, chief market analyst at Exinity Group.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.2% to 104.03, making gold more expensive for international buyers and weighing on demand.
Despite this temporary dip, gold’s broader uptrend remains intact, particularly as investors remain cautious ahead of the April 2 deadline for new U.S. tariffs. Market uncertainty, fueled by trade tensions and economic risks, has propelled gold to multiple record highs this year, including four instances above $3,000.
Analysts believe exchange-traded product (ETP) demand could sustain gold prices even as physical demand slows in key markets like India and China.
Gold is traditionally viewed as a safe-haven asset, thriving during periods of inflation, geopolitical uncertainty, and economic volatility. Additionally, expectations of lower interest rates provide further support. The Federal Reserve held rates steady on Wednesday but signaled two potential quarter-point cuts by the end of the year, which could enhance gold’s appeal as an alternative investment.