Gold settled lower Friday, logging its worst weekly decline so far this year as the U.S. dollar bounced back from its earlier weakness.
April gold GCJ8, +0.12% fell $2.40, or 0.2%, to settle at $1,330.30 an ounce, falling 1.7% for the week. March silver SIH8, +0.13% slid 10 cents, or 0.6%, to $16.48 an ounce for a weekly drop of 0.8%.
Although gold finished out the week in negative territory, the metal managed to post a mild recovery in the wake of a Fed minutes release on Wednesday. In it, central bankers said they expect inflation to tick higher. Higher inflation can be supportive for gold because the metal is often viewed as a hedge against rising prices.
The Fed suggested an "increased likelihood" of further interest-rate increases, heightening prospects of a rate rise in March and the potential for four rate increases across all of 2018, one more than the Fed had plotted in its policy playbook. But St. Louis Fed President James Bullard on Thursday cast doubt that the Fed will raises rates four times this year
Gold fell "as investors pay attention to speculators who are fueling the dollar rally on the basis that the Fed could increase the interest rate four times this year," said Naeem Aslam, chief market analyst with Think Markets. "However, we think that this pullback could be an opportunity for the [gold] bulls to jump on the trade as this could be a buying opportunity."
The ICE U.S. Dollar Index DXY, -0.11% tacked on 0.2% for the day and about 0.9% for the week, its second largest rise for 2018. according to FactSet. A gain Friday would be its third in four sessions. Last week, the index fell to its lowest point since 2014. The yield on the 10-year Treasury note TMUBMUSD10Y, -0.09% meanwhile, was last trading at 2.88%.
A stronger dollar can weigh on dollar-denominated commodities because it makes them more expensive to buy for holders of other currencies.
In other metals, March copper HGH8, +0.08% fell 2 cents, or 0.9%, to end at $3.21 a pound. For the week, the metal edged down 0.2%.
April platinum PLJ8, +0.12% slipped 60 cents to settle at $998.80, falling 1.3% for the week, while March palladium PAH8, +0.12% bucked the trend to gain $7.65, or 0.7%, to $1,041.15 an ounce for a weekly drop of 0.2%.