Gold prices fell on Friday after U.S. Treasury Secretary Steven Mnuchin called for an end to some of the Federal Reserve’s pandemic lending, sparking uncertainty about stimulus programs that have played a key role in reassuring financial markets.
Spot gold slipped 0.2% to $1,864.54 per ounce by 0359 GMT and was headed for a second week of decline. U.S. gold futures were up 0.1% at $1,863.80.
“If the Fed does start shrinking its assistance program that could be a bit of headwind for gold again … The monetary debasement argument that has supported gold could weaken,” said Lachlan Shaw, National Australia Bank’s head of commodity research.
Gold, considered a hedge against inflation and currency debasement, has gained 23% this year, benefiting mainly from unprecedented stimulus measures unveiled to cushion the pandemic impact.
Bullion was down 1.3% for the week as promising Covid-19 vaccine trials dimmed the metal’s appeal.
Silver was flat at $24.09 per ounce. Platinum fell 0.2% to $949.78 per ounce, while palladium eased 0.2% to $2,321.05.