2023.06.0914:09:00UTC+00Gold Prices Decline Amidst Firm Dollar

Prices of the yellow metal declined on Friday amidst the Dollar's strength.

The Dollar Index (DXY), a measure of the Dollar's relative strength against a basket of six currencies increased 0.06 percent overnight to 103.40 The day's range was between a low of 103.29 and a high of 103.57. The Dollar's strength dampened the sentiment for the yellow metal.

The Dollar remained firm amidst a safe haven demand triggered by the weak inflation readings from China and fears of a recession.

Mixed expectations regarding the Fed's monetary policy decision also weighed.

The CME FedWatch tool currently shows a 74.8 percent probability for a pause and a 25.2 percent probability for a rate hike of 25 basis points in the review due on June 14. Gold declined even though expectations of a pause increased following a surge in the initial jobless claims in the U.S.

Data released on Thursday showed the number of Americans filing for unemployment benefits jumping to 261 thousand in the week ended June 3 versus the previous reading of 233 thousand and expectations of 235 thousand. The rise in jobless claims which implied a weakening labor market is seen reducing the headroom available to the Fed to hike rates further aggressively.

Gold Futures for August settlement shed 0.32 percent to trade at $1,972.25. The day's trading range has been between $1,972.05 and $1,987.55.

Spot Gold erased 0.43 percent to trade at $1,957.15 per troy ounce. The day's trading range has been between $1,956.68 and $1,973.10.

Monetary policy decisions by the Federal Reserve, the European Central Bank and the Bank of England are due in the coming weeks. The CPI data from the U.S. is also due next week.