Gold prices fell slightly on Friday, November 15, sending the precious metal into its worst week in three years. Spot gold was down 0.1 percent at $2,562.61 per ounce, falling more than 4 percent for the week.

The precious metal had previously hit a two-month low, marking a decline from last month’s record high of over $220.

US gold futures were also down 0.2% at $2,567.10.

In India, the price of 10 grams of 24 carat gold in Delhi stood at ₹75,813, a decrease of ₹1,200 from the previous rates.

Main factors affecting gold prices

Various factors guide gold’s price movements this week; particularly the strengthening U.S. dollar and expectations regarding future interest rate decisions by the Federal Reserve.

The dollar rose following Donald Trump’s election victory, causing gold to become more expensive for buyers in other currencies.

Analysts also pointed out that expectations for fewer interest rate cuts in the coming months also put pressure on gold.

Forex.com market analyst Fawad Razaqzada emphasized that gold’s weakness reflects the expectation of a more restrictive US monetary policy under the Trump administration, especially in 2025.

Higher interest rates increase the opportunity cost of holding gold, which does not earn any interest or dividends, making investments in other assets more attractive.

Federal Reserve Chairman Jerome Powell reinforced that sentiment in comments Thursday, arguing that steady economic growth, a strong job market and persistent inflation justify caution when it comes to rate cuts.

Markets give only a 59% chance of a 25 basis point rate cut in December, according to the CME Fedwatch tool. This rate was 83% compared to the day before.

US economic data and global outlook

From an economic perspective, US data released on Thursday (November 14) revealed that producer prices increased in October, raising concerns that progress towards reducing inflation could stall.

Investors are closely awaiting U.S. retail sales data scheduled for release today, which could provide more insight into the health of the economy.

LKP Securities Research Analysis Vice President Jateen Trivedi emphasized that the US Consumer Price Index (CPI) being stronger than expected at 2.6% against the expected 2.4% further increases the strength of the dollar.

While the Federal Reserve continues to cut interest rates as inflation approaches its 2% target, a higher-than-expected CPI reading may lead the Fed to pause further interest rate cuts, increasing downward pressure on gold.

What’s next for gold?

Despite the challenges, analysts remain optimistic about gold’s long-term outlook, especially if economic uncertainty continues.

City Index senior analyst Matt Simpson said Powell’s remarks could limit immediate gains for gold, but another turbulent term under President Trump could trigger safe-haven flows and provide support for the yellow metal.

Looking ahead, a relatively quiet US economic calendar next week could allow gold to recover and potentially retest the $2,600 per ounce level.

It is vital for gold investors to monitor developments around US monetary policy, economic data and any political changes as these factors continue to put heavy pressure on gold prices.