Gold prices dipped 0.1% to $4,991.99 per ounce on Friday, with spot gold down 1% for the week as the dollar climbed to a near one-month high. Traders are weighing the Federal Reserve's monetary policy pivot, with markets pricing in a June rate cut after stronger-than-expected U.S. economic data. Brian Lan of GoldSilver Central noted dollar strength is pressuring precious metals, though gold has held steady despite closed China markets for Lunar New Year.

The Federal Reserve's hawkish stance and U.S.-Iran tensions are driving dollar gains, which typically hurt non-yielding assets like gold. However, analysts say underlying demand persists, with Goldman Sachs predicting gold could rebound to $5,400 by end-2026 if rate cuts materialize. The firm cited central bank buying acceleration and private investor responses to Fed policy shifts as key catalysts.

Spot silver fell 0.6% to $77.88, while platinum and palladium also declined. The dollar's weekly advance—the strongest since October—reflects resilience in U.S. growth narratives. With CME's FedWatch Tool showing 50% probability for a June rate cut, investors are balancing near-term dollar momentum against gold's medium-term upside.

This divergence highlights risks for gold as dollar strength persists. Yet, technical indicators suggest a potential reversal if Fed easing begins. Traders remain split between short-term headwinds and long-term bullish fundamentals, underscoring gold's role as a hedge in volatile policy environments.