Gold falls on dollar firmness and heads for its worst week in four months

Gold fell on Friday on a stronger dollar and prices headed for their worst week in nearly four months as some safe-haven demand spurred by Russia’s invasion of Ukraine cooled.

By 1002 GMT, spot gold was down 0.5% at $1,932.20 an ounce, and US gold futures were down 0.5% at $1,933.10.

The dollar appreciated, hurting foreign buyers’ appetite for bullion.

“Gold and the dollar are very choppy, headline-driven markets, so we could see a lot more action throughout the day in both directions,” said Craig Erlam, senior market analyst at OANDA, adding that the apparent progress in conversations between Russia and Ukraine was largely responsible for the weekly drop in gold.

So far this week, gold has tumbled 2.7% as investors initially priced in the possibility of the Federal Reserve raising interest rates aggressively.

Higher rates tend to increase the opportunity cost of holding gold, which does not earn interest.

Spot palladium rose 2.3% to $2,567.02 an ounce but was headed for a weekly drop of around 8.8% as supply fears from top producer Russia also eased.

Spot silver was down 0.4% at $25.24 an ounce, and platinum was up 1.5% at $1,036.53.