Gold declines as oil rises, inflation concerns grow

Gold prices edged lower on Friday and were heading for a second consecutive weekly loss, pressured by rising oil prices and growing concerns over inflation and interest rate hikes.

Spot gold fell 0.2 percent to US$4534.29 per ounce by 0047 GMT, bringing its weekly losses so far to around 0.1 percent.

US gold futures for June delivery also declined 0.1 percent to US$4535.60.

Among other precious metals, silver dropped 0.5 percent to US$76.32 per ounce, platinum fell 0.3 percent to US$1959.20, while palladium was steady at US$1377.89 per ounce.

Gold kept trading at a steep discount in India this week, as ​price volatility ⁠dampened demand, while premiums eased in China.

Dealers in India ‌quoted discounts of up to $78 an ‌ounce over official domestic prices this week, inclusive of 15% import and 3% sales levies, down from the prior week's record discounts of up to $207 an ‌ounce.

"Retail buyers are a bit confused by the recent price swings after the ⁠government raised import duty earlier this month. Most of them are just waiting for prices to settle down," said a Kolkata-based jeweller.

The South Asian country earlier this month raised import tariffs on gold and silver to 15% from 6% as part of efforts to reduce overseas purchases of the metals ​and ease pressure on foreign exchange reserves from higher oil prices.

Jewellers are ‌reluctant to build stocks as the wedding season draws to a close and uncertainty persists over retail demand, said a Mumbai-based bullion dealer with a private ⁠bank.

In top consumer China, bullion traded at premiums of $10 to $20 an ounce over the global benchmark price, compared with the previous week's premiums of $15 to $20.

"Fed rate-hike anxiety, ​rising ‌bond yields, and dollar strength continue to weigh on gold in China," ‌said Bernard Sin, regional director of Greater China at MKS PAMP.

A stronger dollar makes greenback-priced bullion expensive for other currency holders, while elevated bond yields increase the opportunity cost ‌of holding ‌the non-yielding metal.

"Near-term, physical demand remains ⁠caught between conflict-driven safe-haven demand and policy-driven headwinds," he said.

Spot gold prices ‌fell to a near two-month low on Wednesday, weighed down by higher Treasury yields and a stronger dollar.

In Hong Kong, gold traded ⁠at par to premiums of $2, while in Japan , gold was ​sold at a discount of $0.25. In Singapore , gold was sold at premiums of $1 to $3.