Mubasher: Gold prices declined on Friday, having steadied in the previous session at around six-month peak, as the dollar remained under pressure on the outlook for US interest rates and the economy, while investors avoided risky assets.

By 9:04 am GMT, US gold futures fell 0.35% to $1,263.50 per ounce, while spot gold edged down 0.06% to $1,259.12 per ounce, after jumping more than 1% in the earlier session and hitting a high of $1,266.4 per ounce which was last seen on 26 June.

So far this week, the precious metal rose nearly 1.9%.

The US dollar index, which traces the greenback against a basket of six major peers, inched up 0.07% to 96.3470.

“A depreciating dollar coupled with expectations of fewer rate hikes in 2019 remains the primary factors supporting spot gold prices,” research analyst FXTM Lukman Otunuga told Thomson Reuters.

“The US Federal Reserve’s failure to reassure investors that they understand the risks across global markets is seen fuelling appetite for safe-haven gold in the short- to medium-term,” Otunuga said.

The Fed’s commitment to maintain the core of its plan to tighten monetary policy, despite mounting uncertainty about global economic growth, pressured the greenback, and rattled equity markets, raising non-US investor appetite for dollar-denominated gold.

“With volatile equity markets accelerating the flight to safety, gold is likely to remain supported for the rest of 2018,” Otunuga added.

Global equities extended their tumble on Friday as the potential US government shutdown and further Fed interest rate hikes fuelled investor fears over the economic outlook.