Gold prices pulled back Friday from midweek record highs as a stronger dollar and increasing uncertainty over the upcoming U.S. presidential election put pressure on the yellow metal.
Gold was down more than 1% in Friday morning trading, hovering around $2,405 per ounce after notching an all-time high of $2,483 per ounce on Wednesday. Elsewhere, silver was also flagging, down more than 1.5% and dipping below the $30 threshold at $29.25 per ounce.
Gold's retreat comes as the U.S. dollar strengthened and traders locked in profits. A rise in 10-year Treasury yields also squeezed the commodity early Friday.
"It appears to be a combination of factors, including a stronger U.S. dollar, rising U.S. yields, easing geopolitical tensions, and potential profit-taking, all contributing to gold's weakness ahead of the weekend," market analyst Zain Vawda told Reuters.
The commodity was also strained by growing uncertainty surrounding the U.S. presidential election. For the past several days, talk in political circles has grown louder that Democratic President Joe Biden might soon decide to drop out of the race as his inner circle becomes more convinced that his chances of a victory in November appear slim. A Biden departure and possible win for Republican Donald Trump in November has Wall Street taking stock of how Trump might reshape the Fed and monetary policy.
Gold's rollercoaster ride began Monday with dovish comments from Federal Reserve Chairman Jerome Powell, who told the Economic Club in Washington that the Fed wouldn't wait for inflation to reach policymakers' 2% target before cutting interest rates.
Powell's remarks – and similar messaging from a string of his colleagues in the days that followed – led to the market forecasting as many as three rate reductions by the end of the year, with the first coming in September.