Gold prices pared losses on Friday after slightly softer-than-expected US inflation data reinforced expectations that the Federal Reserve will cut interest rates next week, but the metal was still set for its first weekly loss in 10 weeks.
Spot gold fell 0.2 per cent at $4,118.29 per ounce by 01:42 p.m. ET (1742 GMT), after falling nearly 2 per cent earlier in the session. The price is down over 3 per cent for the week.
US gold futures for December delivery settled 0.2 per cent lower at $4,137.8 per ounce.
“Gold and silver jump as September core CPI comes in lower than expectations but it’s likely insufficient to entirely blunt this week’s selloff. Price action suggests that gold and, especially silver, need another leg lower before consolidation,” said Tai Wong, an independent metals trader.
Spot gold notched a record high of $4,381.21 on Monday, but has fallen over 6 per cent since, as investors booked profits and signs of easing US-China trade tensions dented safe-haven demand.
Spot silver was down 0.6 per cent at $48.65/oz, on track for a weekly loss of over 6 per cent.
Labor Department data showed that US consumer prices rose 3.0 per cent in the 12 months through September, slightly below economists’ expectations of a 3.1 per cent increase.
Traders are almost fully pricing in a rate cut at the US central bank’s meeting next week, with another expected in December.
Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.
Meanwhile, the White House confirmed on Thursday that US President Donald Trump will meet Chinese President Xi Jinping next week, ahead of the November 1 deadline for additional US tariffs on Chinese imports.
“If (gold prices) fall below $4,000, we’re going to continue to see more of a dramatic washout in the market, perhaps down to $3,850, the next major support level,” said Phillip Streible, chief market strategist at Blue Line Futures.
Bullion has gained 55 per cent this year, on geopolitical and trade tensions, robust central bank buying and expectations of US interest rate cuts among other factors.
Elsewhere, platinum slipped 1 per cent to $1,608.77, and palladium fell 0.5 per cent to $1,450.05.