Gold trims losses after US inflation data; set to end nine-week win streak

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% at USD 4,118.29 per ounce by 01:42 p.m. ET (1742 GMT), after falling nearly 2% earlier in the session. The price is down over 3% for the week.

US gold futures for December delivery settled 0.2% lower at USD 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 USD 4,381.21 on Monday, but has fallen over 6% since, as investors booked profits and signs of easing US-China trade tensions dented safe-haven demand.

Spot silver was down 0.6% at USD 48.65/oz, on track for a weekly loss of over 6%.

Labor Department data showed that US consumer prices rose 3.0% in the 12 months through September, slightly below economists’ expectations of a 3.1% 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 USD 4,000, we’re going to continue to see more of a dramatic washout in the market, perhaps down to USD 3,850, the next major support level,” said Phillip Streible, chief market strategist at Blue Line Futures.

Bullion has gained 55% 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% to USD 1,608.77, and palladium fell 0.5% to USD 1,450.05.

(Reporting by Noel John, Kavya Balaraman, and Pablo Sinha in Bengaluru; Editing by Vijay Kishore, Alexandra Hudson, Leroy Leo, and Alan Barona)