Spot Gold was on course for its first weekly loss in ten and also the steepest one since November 2024 amid further unwinding of long positions ahead of the key US CPI inflation report.
Annual headline consumer inflation in the US probably picked up to 3.1% in September from 2.9% in August, according to market consensus.
And, annual core CPI inflation probably steadied at 3.1% in September.
“From gold’s perspective, a tame CPI print would be welcomed as this would keep the Fed on track to cut rates twice before year-end,” KCM Trade Chief Market Analyst Tim Waterer was quoted as saying by Reuters.
“But any upside surprises in inflation would likely see the dollar gain further traction higher, which could be to the detriment of gold.”
Markets are now pricing in about a 99% chance of a 25 basis point Fed rate cut in October and a 92% chance of another 25 bps cut in December.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
Meanwhile, signs of easing US-China trade tensions have reduced the safe-haven allure of the precious metal. US President Donald Trump is to meet Chinese President Xi Jinping next week as part of a trip to Asia, according to a White House announcement.
Spot Gold was down 0.87% on the day to trade at $4,090.13 per troy ounce.
The precious metal has retreated 3.82% so far this week.
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