Gold prices remained under pressure on Friday despite a modest recovery, as investors continued to reassess the U.S. Federal Reserve's interest rate outlook. The precious metal is now headed for its fourth consecutive weekly decline, weighed down by a resilient U.S. dollar and expectations that the Fed could maintain a tighter monetary policy for longer.

Key Highlights

• Gold set for fourth consecutive weekly loss amid stronger dollar and persistent expectations of higher U.S. interest rates.
• Lower global bullion prices may create favourable buying opportunities for Indian jewellery and investment demand ahead.

Spot gold was trading around $4,052 per ounce, while U.S. gold futures hovered near $4,068 per ounce after recovering from a seven-month low touched earlier this week. However, bullion remains down roughly 2.5% for the week after briefly slipping below the psychologically important $4,000 level for the first time since November.

The recent weakness follows a series of economic indicators that continue to influence expectations around U.S. monetary policy. While softer inflation data slightly reduced expectations of an immediate rate hike, markets still anticipate additional increases this year. A stronger U.S. dollar has also reduced the appeal of non-yielding assets such as gold by making the metal more expensive for overseas buyers.

Also Read: Gold Heads for Third Weekly Loss: What It Means for Indian Buyers?

Commenting on the outlook, Ole Hansen, Head of Commodity Strategy at Saxo Bank said,"Gold is trading near $4,000 for a third consecutive session, with investor sentiment still shaken by the recent selloff as markets adjust to the twin headwinds of a hawkish Fed and a stronger dollar."

He further added, "While the technical breakdown continues to weigh on sentiment, continued declines in energy prices and softer bond yields may eventually reduce pressure on the Federal Reserve to tighten policy further, potentially offering some support to the precious metal."

Analysts also noted that easing crude oil prices following improved shipping movement through the Strait of Hormuz could help moderate inflationary pressures, potentially reducing the need for aggressive monetary tightening over the coming months. Nevertheless, technical indicators suggest gold could remain vulnerable if prices fall decisively below the $4,000 mark.

What Does This Mean for India?

For Indian consumers, the correction in international bullion prices could gradually translate into lower domestic gold prices, especially if the rupee remains stable. With the festive and wedding season approaching later this year, softer global prices may encourage jewellery purchases and retail investment demand.

India, one of the world's largest consumers of gold, is highly sensitive to international price movements and currency fluctuations. While recent volatility has kept physical demand relatively cautious, continued price corrections could offer attractive entry points for long-term investors and jewellery buyers if the market stabilises over the coming weeks.