Gold prices dipped in Asian trade on Friday, retreating further from record highs set earlier this week as the dollar rose sharply following the Swiss National Bank's surprise interest rate cut, putting pressure on commodity markets.

The yellow gold rocketed to record highs above $2,200 per ounce after the Federal Reserve reiterated its forecast of at least three interest rate cuts in 2024. However, the yellow metal remained at these highs for just a short period, as the dollar rallied rapidly in response to dovish signals from other major central banks.

Spot gold declined 0.4% to $2,173.62 an ounce, while April gold futures slid nearly 0.5% to $2,174.90 an ounce at 00:28 ET (04:28 GMT).

Dollar strength hits gold as major central banks grow dovish.
The dollar index surged to a three-week high over 104, putting pressure on gold.

The greenback surged as the SNB's surprise rate decrease, along with dovish indications from the Bank of England, left the greenback as the sole major high-yielding, low-risk currency.

Signs of strength in the US economy, following the Fed's bullish forecast and solid purchasing managers index data, kept traders firmly focused on the dollar.

This assumption put pressure on metal prices, as investing in precious metals like gold generates no direct returns.

The dollar's strength is also projected to hinder any significant gains in bullion, at least until the Fed begins cutting interest rates later this year. The central bank is still expected to decrease interest rates by 25 basis points in June, according to the CME Fedwatch tool.

An eventual drop in interest rates is projected to boost bullion prices later this year, with Citi analysts predicting a year-end price of $2,300 per ounce for the yellow metal.

Other precious metals fell in Asian trade, giving up most of their gains after the Fed. Platinum futures declined 0.7% to $905.10 per ounce, while silver futures dipped 1% to $24.758.

Copper pulls off 11-month heights as China concerns grow.
Three-month copper prices on the London Metal Exchange down 1% to $8,882.0 per ton, while one-month US copper futures fell 1.2% to $4.0175 per pound. Both contracts dropped dramatically from 11-month highs set earlier this week.

Copper was also affected by deteriorating sentiment toward China, with the country's stock markets falling sharply on Friday over concerns about slowing economic development and more potential US sanctions.

However, the outlook for copper markets remained bleak, particularly when news surfaced that big Chinese copper refiners intended to reduce output this year.