NEW YORK / Content Syndication Services / — Gold declined on Friday and headed for a second weekly loss as higher oil prices kept inflation concerns at the center of global commodity trading. Spot gold was down 0.6 percent at $4,515.83 an ounce by early afternoon New York time, after falling as much as 1 percent earlier in the session. U.S. gold futures for June delivery settled 0.4 percent lower at $4,523.20 an ounce.
The move came as crude oil benchmarks advanced, keeping energy costs in focus for investors tracking inflation and interest rate expectations. Brent crude traded above $103 a barrel on Friday, while U.S. West Texas Intermediate crude also rose. Oil prices have remained elevated after months of supply concerns tied to the Middle East, making energy one of the main inputs shaping market views on inflation, consumer costs and central bank policy.
Gold is widely held as a store of value during periods of inflation and financial stress, but higher Treasury yields and rate expectations can weigh on bullion because it does not pay interest. The U.S. 10 year Treasury yield remained near recent highs during Friday trading. Market pricing also showed increased attention on the possibility of tighter monetary policy after recent U.S. inflation and consumer sentiment data pointed to stronger price pressures.
Energy keeps inflation in focus
The U.S. Bureau of Labor Statistics said the Consumer Price Index rose 0.6 percent in April and was up 3.8 percent from a year earlier. Energy prices increased 3.8 percent in April after a 10.9 percent rise in March, while gasoline prices rose 5.4 percent for the month and 28.4 percent over the year. Core prices, excluding food and energy, rose 0.4 percent in April and 2.8 percent from a year earlier.
The University of Michigan’s final May consumer sentiment index fell to 44.8 from 49.8 in April and 52.2 a year earlier. The survey showed current conditions at 45.8 and consumer expectations at 44.1. Year ahead inflation expectations rose to 4.8 percent in May from 4.7 percent in April, while long run inflation expectations increased to 3.9 percent from 3.5 percent, underscoring the household impact of higher living costs.
Rate expectations pressure bullion
Federal Reserve Governor Christopher Waller said in a May 22 speech that higher energy and commodity prices were lifting headline inflation and prices for other goods. He said he would support removing language that signals an easing bias from the policy statement and said a rate cut was no more likely than a rate increase. His remarks placed inflation, rather than labor market weakness, at the center of his near term policy assessment.
Other precious metals also declined on Friday. Spot silver fell 1.1 percent to $75.85 an ounce, platinum lost 2.5 percent to $1,916.62 and palladium dropped 2.1 percent to $1,349.30. All four major precious metals were on course for weekly losses. Gold remained higher than year earlier levels, but the latest session showed how rising oil, elevated yields and inflation data shaped short term trading across metals markets.