Gold (XAU/USD) prices extended this week’s retracement slide from all-time tops and continued losing ground for the second straight day on Friday. It also marked its third day of negative movement in the previous four and dragged the commodity to over three-week lows near the $2,850 region during the first half of the European session. Expectations that the Federal Reserve (Fed) will stick to its hawkish stance amid persistently high inflation helped the US Dollar (USD) recover further from over two-month lows touched on Wednesday. This, in turn, was considered a key factor weighing on the non-yielding yellow metal.
Moreover, the decline could also be attributed to some repositioning trade ahead of the US Personal Consumption Expenditure (PCE) Price Index. This crucial US inflation data might influence the Fed’s interest rate outlook and determine the near-term trajectory of Gold prices. Meanwhile, the intraday decline seemed unaffected by the risk-off impulse, which tends to benefit the safe-haven bullion. Even concerns over US President Donald Trump’s tariff plans and sliding US Treasury yields failed to provide any support, which supports prospects for a further near-term depreciating move for the XAU/USD pair.