Gold Prices Steady as Inflation Eases, Fed Rate Cut in Focus
Gold steadied Friday after softer U.S. inflation data strengthened bets on a Fed rate cut next week, though the metal faces its first weekly loss in ten weeks.
A Calm After the Drop
Gold prices steadied on Friday after an early tumble, buoyed by slightly softer-than-expected U.S. inflation data that reignited hopes for a Federal Reserve rate cut next week. Despite the late recovery, the precious metal remained on track to break its ten-week winning streak.
By 10:35 a.m. ET (1435 GMT), spot gold held firm at $4,124.89 per ounce, paring back from a near 2% plunge earlier in the day. U.S. gold futures for December delivery slipped just 0.1% to $4,140.90. For the week, however, gold is down roughly 2.9%, marking its first loss since mid-summer.
Inflation Data Shifts Market Mood
The U.S. Labor Department’s latest report showed consumer prices rising 3.0% year-over-year in September, slightly below economists’ projections of a 3.1% increase. The modest miss reassured markets that inflationary pressures continue to ease a critical factor supporting expectations for the Fed to begin loosening its policy stance.
Traders are now almost fully pricing in a rate cut at next week’s Federal Reserve meeting, with another reduction anticipated before the year’s end. Lower interest rates tend to boost gold’s appeal by reducing the opportunity cost of holding the non-yielding asset.
Gold’s Record Run Pauses
Earlier this week, spot gold hit an all-time high of $4,381.21, fueled by geopolitical unease and central bank demand. But the rally fizzled as investors began taking profits and signs of easing U.S.-China trade tensions dampened safe-haven appetite.
Since Monday’s peak, gold has slipped more than 6%, snapping an extraordinary run that had lifted prices over 55% this year. The gains were largely driven by global uncertainty, robust central bank buying, and persistent speculation around eventual U.S. rate cuts.
Short-Term Pressure Persists
Market analysts say that while gold remains in a strong long-term uptrend, further short-term weakness could still lie ahead.
“Gold and silver rallied briefly after the CPI report came in softer than expected, but it’s not enough to undo this week’s heavy selling,” noted Tai Wong, an independent metals trader. “Both metals likely need another downward leg before consolidating.”
Phillip Streible, chief market strategist at Blue Line Futures, warned that a break below key price levels could intensify the slide. “If gold dips under $4,000, we could see a sharper washout toward $3,850 the next major support zone,” he said.
Silver, Platinum, and Palladium Mixed
Other precious metals mirrored gold’s volatile session.
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Spot silver slipped 0.6% to $48.62 per ounce, heading for a steep 6.3% weekly loss.
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Platinum fell 1.5% to $1,601.37,
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while palladium inched 0.2% higher to $1,459.43, supported by supply constraints and industrial demand.
U.S.-China Talks Ease Market Anxiety
The White House confirmed Thursday that President Donald Trump will meet Chinese President Xi Jinping next week, just ahead of the November 1 deadline for another round of U.S. tariffs on Chinese imports.
The announcement further calmed investor nerves, pulling some capital away from gold as a safe-haven hedge. A potential thaw in trade relations between the world’s two largest economies could temper the metal’s recent momentum.
Eyes on the Fed
The coming week’s Federal Reserve policy meeting is expected to set the tone for gold’s next move. A rate cut could reignite demand, but any sign of caution from policymakers may pressure prices further.
Analysts suggest that despite near-term volatility, the broader outlook for gold remains favorable as global growth concerns, central bank accumulation, and ongoing geopolitical risks continue to underpin long-term demand.
“Even if we see some correction in the short term,” Wong said, “the macro backdrop for gold remains incredibly supportive heading into next year.”
A Pause, Not a Reversal
Gold’s first weekly decline in ten weeks underscores a temporary breather in a year defined by historic gains. While inflation is cooling and rate cuts appear imminent, traders remain cautious ahead of next week’s Fed decision.
For now, the precious metal stands at a crossroads poised between short-term correction and the possibility of another leg higher, depending on how central bankers chart their next move.
(Disclaimer: This article is for informational purposes only. Market prices and forecasts are subject to change based on economic data, central bank policy decisions, and global market developments. Readers should not interpret this analysis as financial advice.)
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