Gold Wavers Ahead of U.S. Inflation Test

SadaNews Economy - Gold prices fell on Friday, heading towards its first weekly loss in ten weeks, as the dollar strengthened and investors prepared for the release of the key U.S. inflation report later today.

Spot gold declined by 0.9 percent to $4,086.46 an ounce at 06:33 GMT, with prices down by 3.8 percent since the beginning of the week, heading towards the largest weekly decline in percentage terms since November 2024, according to Reuters.

U.S. gold futures for December delivery fell by 1.1 percent to $4,101.80 an ounce.

The dollar index recorded its third consecutive session of gains against a basket of currencies, making the precious metal more expensive for holders of other currencies.

Tim Waterer, Chief Market Analyst at KCM Trade, stated that "the upcoming meeting between U.S. and Chinese leaders could represent a real opportunity to ease trade tensions, which would bolster the dollar and reduce gold's appeal as a safe haven."

The White House announced on Thursday that U.S. President Donald Trump will meet with Chinese President Xi Jinping next week during his visit to Asia, amid escalating trade tensions between Washington and Beijing along with reciprocal retaliatory measures.

Investors are now focused on the U.S. Consumer Price Index (CPI) report, expected to show core inflation stabilizing at 3.1 percent in September, after its release was delayed due to the federal government shutdown.

Investors have already priced in a 25 basis point rate cut at the Federal Reserve meeting next week.

Waterer added: "From a gold perspective, any moderate reading of inflation would be positive, as it would keep the Fed on track for two additional rate cuts before the end of the year. However, conversely, any upside surprise in price data could push the dollar higher, which would pressure gold."

Gold typically benefits from falling interest rates, as they reduce the opportunity cost of holding the non-yielding metal.

In other metal markets, spot silver fell by 1.6 percent to $48.14 an ounce, heading towards its worst weekly performance since March, with a decline of 7 percent since the start of the week.

Platinum also dropped by 0.5 percent to $1,617.55, and palladium declined by 2.8 percent to $1,416.59.