Gold set for weekly decline

Gold prices hovered around $3,340 per ounce on Friday, poised for their first weekly loss in three weeks, as a string of stronger-than-expected US economic data tempered expectations for near-term interest rate cuts by the Federal Reserve.

The precious metal, which typically benefits from lower rates and a weaker dollar, faced headwinds as recent macroeconomic indicators signaled underlying resilience in the world’s largest economy.

June retail sales rebounded more than anticipated, suggesting that consumer spending—the engine of US economic growth—remains robust despite the ongoing burden of elevated prices and trade-related disruptions. In addition, weekly initial jobless claims dropped unexpectedly to a three-month low, pointing to continued strength in the labor market and further reinforcing the notion that the economy is withstanding the pressure from tighter financial conditions and tariff-related uncertainty.

In light of these developments, Fed Governor Adriana Kugler noted that it would be appropriate to keep interest rates steady "for some time," emphasizing a wait-and-see approach to ensure inflation continues to moderate. However, not all officials are aligned: San Francisco Fed President Mary Daly reiterated her outlook for two rate cuts later this year, reflecting a more dovish stance and highlighting the internal division within the Fed over the policy path ahead.

Despite the tempered rate-cut expectations, gold’s downside was cushioned by persistent safe-haven demand amid elevated global uncertainty. Trade tensions remained in focus after President Trump announced plans to formally notify over 150 countries of their existing tariff rates under a new transparency initiative. While not an immediate escalation, the move raised concerns among global partners and added to fears of trade fragmentation.

Geopolitical risks also continued to support gold’s appeal. The protracted conflict between Russia and Ukraine has shown signs of intensifying, with reports of new military buildups near key border regions. At the same time, ongoing unrest in parts of the Middle East—including flare-ups in Syria and rising tensions around the Strait of Hormuz—have contributed to a broader atmosphere of geopolitical instability.

Altogether, while gold faced pressure from shifting Fed expectations and a firmer dollar, its role as a hedge against geopolitical and trade-related risks remained firmly intact. Investors appear to be balancing the impact of stronger US economic data against a backdrop of global uncertainty, keeping gold prices range-bound heading into the weekend.