MUSCAT: Gold prices slipped further on Friday, marking a continuation of their downward trajectory and setting the stage for a second consecutive weekly loss. The dip comes as the U.S. dollar strengthens, reducing the appeal of gold as an alternative investment. Market analysts note that the dollar’s rise is driven by expectations of sustained higher interest rates in the U.S., which makes non-yielding assets like gold less attractive to investors seeking returns.
In addition to the dollar’s gains, ongoing geopolitical tensions in the Middle East have complicated market sentiment. While such instability often boosts demand for safe-haven assets like gold, the current environment has had a mixed impact. Investors appear torn between the need for security and the appeal of currency-backed assets amid an uncertain global economic outlook. This dual pressure has kept gold from rebounding despite heightened geopolitical risks.
Recent data from major gold exchanges shows a notable decline in fund inflows, as many investors shift their focus to equities and the bond market. Institutional buyers, in particular, have been cautious, preferring liquid positions that offer better short-term gains. Analysts also point out that gold’s technical indicators are approaching key support levels, which could influence trading behavior in the coming sessions.
Looking ahead, the price of gold may remain under pressure unless there is a significant shift in either geopolitical events or monetary policy expectations. While central banks continue to accumulate gold for long-term reserves, the broader market remains reactive to macroeconomic data, dollar strength, and investor risk appetite. Traders are closely watching upcoming economic reports for cues on inflation, interest rates, and potential safe-haven demand resurgence.
