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Gold losses on stronger dollar

Gold prices were flat on Friday but on course for a loss this week as the pressure of a stronger dollar overshadowed support from trade uncertainties caused by U.S. Tariffs.

As of 0242 GMT, spot gold remained unchanged at $3,287.65 an ounce. Bullion has fallen 1.5% this week.

U.S. Gold Futures declined by 0.3% to $3337.20.

Gold is now more expensive to other currency holders due to the dollar index reaching its highest level since 29 May.

"Gold has been trading in the $3,250-$3,450 range for the past two months and we expect it to move towards the lower end of this range, and possibly break it," said Marex Analyst Edward Meir. He added that the Federal Reserve’s hawkish position was also driving the strength of the dollar, which weighed heavily on the bullion.

On Wednesday, the Fed kept interest rates at 4.25% to 4.50% and dampened expectations for a rate cut in September.

Trump signed a executive order Thursday that imposed "reciprocal tariffs" ranging from 10 to 41% on imported goods from dozens countries and foreign locations. This was done ahead of the Friday deadline for a trade agreement.

He raised duties on Canadian products to 35%, up from 25%, for all goods not covered by the U.S. Mexico-Canada Trade Agreement. But he gave Mexico 90 days to negotiate a wider deal.

If trade tensions rise, prices could move up again if various countries are unable to renegotiate lower tariff rates.

In June, the U.S. inflation rate increased as import tariffs began to increase the price of certain goods.

The focus now shifts to U.S. employment data, due later today for more clues on the Federal Reserve's path of rate cuts.

In a low interest rate environment, gold is an asset that does not yield any income.

Spot silver dropped 0.6%, to $36.53 an ounce. Platinum was down 0.2%, to $1,291.55, and palladium remained at $1,191.95. All three metals are headed for losses this week. Reporting by Anmol Chaubey in Bengaluru and Brijesh Patel; editing by Harikrishnan Nair

(source: Reuters)