Gold prices declined in European trade for the fifth straight session, piercing through $1,800 and hitting six-week lows. 

Gold is heading for the largest quarterly loss since early 2021 as global central banks move to hike rates and control inflation. 

Prices Today

Gold prices fell on Friday by 0.85% to $1,792, the lowest since May 16, after losing 0.6% yesterday, the fourth loss in a row. 

Gold lost 1.6% in June, the third monthly loss in a row as investors buy up the greenback in scores. 

The Dollar

The dollar index rose 0.3% on Friday, resuming the gains after a hiatus yesterday, and muscling up against a basket of major rivals, weighing on gold prices. 

Analysts are betting on a 0.75% rate in the next month, in turn underpinning dollar's standing. 

Quarterly Losses 

Gold prices have lost 6.7% in the second quarter of the year, the first such loss in the last three quarters. 

The Fed took a historic decision this month to hike rates by 0.75% to 1.75%, the highest hike since 1994.

Bank of England hiked rates by 25 basis points to 1.25%, the fifth such increase in a row.

Swiss Central Bank decided to hike rates by 50 basis points at the June 16 meeting to minus 0.25%, the first such increase since 2007, while analysts expected no change at minus 0.75%.

Higher interest rates weaken demand on gold prices as it becomes less attractive as an investment.

The SPDR

Gold holdings at the SPDR Gold Trust fell 2.32 tones yesterday, the eighth decrease in a row, to a total of 1,050 tones, the lowest  since May 17. 

Euro trimmed its losses in European trade off two-week lows against  dollar following record-high inflation data in Europe, bolstering the case for a 0.5% rate hike at the next meeting. 

ECB President Christine Lagarde said this week the ECB is committed to controlling inflation even if that led to economic pain. 

Prices Today

EUR/USD fell 0.45% to 1.0433, with a session-high at 1.0485, while trimming the losses to 0.1% after the inflation data. 

Euro rose 0.4% on Thursday, the first profit in three days, off two-week lows at 1.0382. 

Record Inflation 

Europe's consumer prices rose to 8.6% in June, highest on record, above estimates of 8.5%, and above May's 8.1% reading. 

Core prices, including food and fuel, rose 3.7%, missing estimates of 3.9%, and below 3.8% in the previous reading. 

Lagarde

Christine Lagarde said the ECB is working on controlling runaway inflation no matter the consequences, however she doesn't expect the euro zone to fall into remission. 

European Rates Estimates 

Analysts are going as far as expecting the ECB to hike rates by 0.5% in July, even if a 0.25% hike is still the predominant bet here. 

Europe's consumer prices rose to 8.6% in June, highest on record, above estimates of 8.5%, and above May's 8.1% reading. 

Core prices, including food and fuel, rose 3.7%, missing estimates of 3.9%, and below 3.8% in the previous reading. 

Gold prices fell on Friday as the dollar index rose against major rivals, piercing the psychological level of $1800.

Later today we'll see important data from the US manufacturing PMI.

Some Fed officials mentioned this week the central bank could be heading for a 0.75% rate hike at its next meeting.

FOMC member John Williams believes the US economy could avoid getting into recession.

The final report of the GDP growth rate measured a contraction of 1.6% in the first quarter.

The Atlanta Federal Reserve expected a US contraction in the second quarter by 1%.

The dollar index rose 0.2% to 104.8 as of 5:38 GMT, with a session-high at 104.9.

Spot gold prices fell 0.5% to $1,797.5 an ounce, while marking a monthly loss of 2.2%, and a quarterly loss of 7.7%.