Gold set for biggest weekly fall in 3 years

Muscat: Gold prices on Friday were on track for their biggest weekly decline in over three years as expectations of less aggressive interest rate cuts by the US Federal Reserve lifted the dollar, denting allure for bullion among investors, according to Reuters.

U.S. Treasury yields, meanwhile, extended gains after data showed retail sales in the world's largest economy rose more than expected last month.

"All the uncertainties, specifically the short-term uncertainties have been removed from the mix. Now gold is just going back to fundamentals," said Alex Ebkarian, chief operating officer at Allegiance Gold.

Economists believe President-elect Donald Trump's tariff plans would stoke inflation, potentially slowing the Fed's rate easing cycle.

Higher interest rates make holding gold less attractive as it is a non-yielding asset.

Gold prices in Oman are:

18 Carat – RO24.00

Speaking on Thursday, Fed chair Jerome Powell said the U.S. central bank did not need to rush to lower interest rates.

Markets now see a 62% chance of a 25-basis-point rate cut in December, down from 83% a day before, according to the CME Fed watch tool, opens new tab.U.S. stocks slumped on Friday after Federal Reserve Chair Jerome Powell signaled a slower pace of interest-rate cuts

"So far gold has been negatively impacted by the election of Donald Trump but this can change if there is some more uncertainty which could come back in the medium term," said Kinesis Money market analyst Carlo Alberto De Casa.

Although prices have plunged seven percent from the record high on October 31, they remain higher by 25 percent on a year-to-date basis.

Rate-cut optimism, central bank purchases, and haven demand from geopolitical and economic risks have contributed to the rally. Gold is trading lower by 0.51% at $2,559. It has immediate 100-SMA support at $2,543. If it breaks below this level, it could fall further to $2,482. Meanwhile, it could encounter resistance at $2,584 and $2,593.