Gold futures finished higher Friday but posted its worst monthly performance in seven months, after the ICE U.S. Dollar Index touched its highest level in more than five years on Thursday.
June Comex gold (XAUUSD:CUR) closed the week at $1,911.70/oz, down 1.2% for the week and 2.1% for the month; since briefly topping $2,000 on April 18, the yellow metal plunged as much as 5.5%.
"The price of gold was crushed this week with the dollar rising strongly, which we think may be attributed to the steep selloff in the equity markets," according to Peter Cardillo, chief market economist at Spartan Capital Securities.
"From a technical perspective, the market has undergone a serious setback," Cardillo wrote, but the longer-term outlook remains positive, as the war and inflation "make a solid case for gold to advance to new highs."
While gold has remained resilient against an aggressively hawkish Fed, "as a protracted war in Ukraine simultaneously raised both geopolitical uncertainty and inflation risks and thereby fueled demand for havens, we see few participants left with appetite to buy gold," analysts at TD Securities said.
"Gold's inability to benefit from falling stock markets is a reflection of how difficult it will be for gold to make significant gains given the interest rate outlook outlined by the Federal Reserve," according to Kinesis Money's Rupert Rowling.
Another suppressing factor has been speculation over what Russia might do with its gold reserves, Fidelity International's Graham Smith said: "Given that a substantial proportion of Russia's assets have been frozen, there's always the possibility some of the country's gold - understood to be worth ~$140B - could be sold to make payments."
Eldorado Gold plunged 8% in Friday's trading after reporting a surprise Q1 loss.