The gold commodity traded at around $1,620 per ounce in the European market session today (Friday), shrinking to its lowest level since April 2020.
The yellow metal's depreciating factor is seen to be driven by 'hawkish' comments delivered by Federal Reserve (Fed) officials, flanked by the strengthening labor market factor based on the report of declining unemployment benefit claims prompting the United States (US) Treasury yield to rise.
Looking at the current inflation situation, the President of the Philadelphia Fed, Patrick Harker stated that the central bank is currently actively slowing down the economy and is continuing to try to continue raising interest rates to curb high inflation.
Gold is expected to continue to face the risk of falling in the following weeks due to the expected strengthening of the US dollar while the focus is on policy tightening by the Fed.
However, it is not impossible that the opposite situation can occur if a change in market sentiment changes the direction of price movement and prompts a rebound in gold assets.
Meanwhile, oil prices looked somewhat gloomy at the end of the week as market players expressed their concern over inflation risks and only expected China to boost oil demand.
The spread of Covid-10 in China is also receiving attention because it can affect the global oil market as China is one of the world's largest consumers of oil.
Bloomberg reports that China is considering shortening the quarantine period for tourists from 10 days to 7 days.
Covid-19 in China has affected their demand for oil as the world's largest oil importer, therefore any positive development can have an impact on the recovery of oil prices in the current market.
US WTI oil traded around $83 a barrel while Brent oil fell slightly below $90.
