Gold Edges Higher Amid US Dollar Pause, but Weekly Loss Remains in Sight

Gold prices have edged higher on Friday as the US Dollar and Treasury yields take a breather following their strong rally this week. At $4,310, gold is still trading below its one-week high of $4,244 reached on Thursday.

The precious metal's gains are being hindered by growing expectations that the Federal Reserve may raise interest rates again, which would make gold more expensive for foreign buyers and increase the opportunity cost of holding it.

New York Fed President John Williams said, 'We need to get inflation back to target in a timely manner,' while Richmond Fed President Tom Barkin noted that inflation pressures are spreading beyond energy and tariff-related shocks.

The CME FedWatch Tool now shows around a 71% probability of a rate hike at the October meeting. The stronger US Dollar makes gold more expensive for foreign buyers, while higher yields increase the opportunity cost of holding the non-yielding metal.