Gold Prices Plunge Ahead of Key U.S. Inflation Data

BENGALURU, India — Gold prices fell sharply on Friday, positioning the precious metal for its first weekly loss in nine weeks as the U.S. dollar strengthened. Investors await significant inflation data that could impact the Federal Reserve’s monetary policy decisions.

Spot gold dropped by 0.5% to $2,862.38 an ounce by 11:57 GMT. The decline marks a weekly loss of over 2.5%, the steepest since November. Similarly, U.S. gold futures lost 0.7%, falling to $2,875.

The strengthening dollar was set to record weekly gains, making gold, which is priced in dollars, more expensive for foreign buyers. Ole Hansen, head of commodity strategy at Saxo Bank, noted, “Gold’s overdue correction gathered some further momentum overnight as volatility spikes across markets force leveraged funds to reduce across-the-board exposure.”

This recent dip in gold prices coincides with a broader sell-off in technology stocks, particularly following disappointing earnings from AI leader Nvidia and other major firms of the so-called “Magnificent Seven” on Wall Street.

Despite this week’s anticipated losses, gold is still on track for a second consecutive monthly gain in February, having hit nine record highs during the month. U.S. President Donald Trump announced on Thursday that tariffs of 25% on goods from Mexico and Canada will take effect on March 4, alongside a 10% duty on Chinese imports.

Investors are keenly awaiting the Personal Consumption Expenditures (PCE) inflation data, set to be released at 13:30 GMT, as it may signal how the Federal Reserve will proceed with its rate-easing cycle. Hansen added, “The Fed’s preferred measure is expected to show a lower year-over-year figure, potentially lifting rate cut expectations, not least considering emerging weakness across U.S. economic data.”

Higher interest rates typically reduce the appeal of non-yielding assets like gold. In the physical market, India’s gold demand saw a slight increase in the latter half of the week but was still below normal levels, while Chinese traders continued to offer discounts.

Spot silver fell 0.3% to $31.17, platinum dipped 0.4% to $945.40, and palladium also lost 0.4% to $915.97. All three precious metals are expected to record monthly declines.