By: Economy Middle East

Gold prices fell on Friday and were on track for a fourth consecutive weekly decline as a resilient U.S. dollar and growing expectations of faster Federal Reserve interest rate hikes continued to pressure bullion. 

Spot gold dropped 0.52 percent to $4,011.36 per ounce by 8:54 UAE time, while U.S. gold futures for August delivery fell 0.44 percent to $4,029.80. 

Bullion was set to lose around 4 percent for the week after falling below the key $4,000-per-ounce level on Wednesday for the first time since November 2025. 

In the UAE, local gold rates also moved lower, with 24-carat gold declining AED3.50 to AED482.50 per gram, 22-carat falling AED3.25 to AED446.75, 21-carat dropping AED3.25 to AED428.25, 18-carat losing AED2.75 to AED367.00, and 14-carat slipping AED2.25 to AED286.25 per gram.

Dollar pressure

The U.S. dollar index remained close to its strongest level since May 2025 and was on course for a second straight weekly gain, making gold more expensive for buyers using other currencies. Analysts expect the correction that began after gold’s record high in late January to continue, with prices potentially falling toward $3,400 over the longer term. Since reaching an all-time high of $5,594.82 on January 29, gold has declined roughly 29 percent as inflation linked to the U.S.-Iran conflict strengthened expectations for higher U.S. interest rates.

Fed outlook

Fresh inflation data released on Thursday showed U.S. inflation climbed above 4 percent in May for the first time in three years, reinforcing expectations that the Federal Reserve will tighten monetary policy further. While gold is traditionally viewed as a hedge against inflation, higher interest rates reduce its attractiveness because it does not generate yield. 

Markets are currently pricing in three Fed rate hikes this year, with the CME FedWatch Tool indicating a roughly 64 percent probability of a September increase. 

Other precious metals also declined, with spot silver falling 3.20 percent to $56.42 per ounce, platinum dropping 1.67 percent to $1,570.25, and palladium losing 0.77 percent to $1,157.00, leaving all major precious metals on course for weekly losses.