Gold prices edged lower on Friday and headed for a weekly fall, as rising U.S. Treasury yields and a firmer dollar on the back of hawkish comments from Fed Chair Jerome Powell dented bullion’s appeal.
Spot gold dipped half a percent to $1942.01 per ounce, while U.S. stock futures were down 0.2 percent at $1,944.
During a seminar sponsored by the International Monetary Fund (IMF) on Thursday, Powell suggested the possibility of an aggressive tightening of monetary policy to counter high inflation.
The Fed chief said that the central bank is prepared to raise rates “a little more quickly” to control inflationary pressures and that a half-point rate hike would be on the table when the Fed meets on May 3 and 4.
ECB President Christine Lagarde, however, refrained from adopting a similarly hawkish tone during her speech at the IMF event.
She said inflation must be addressed “in a gradual way” and that future steps “will depend on the incoming data and the evolving assessment of the outlook”.
Separately, Bank of England Governor Andrew Bailey has said rate-setters are not behind the curve on inflation and that the Bank’s 2 percent price target was facing its biggest credibility test.