Gold heads for first weekly loss since May
Gold prices dipped on Friday, heading for their first weekly decline in 10 weeks, pressured by a stronger U.S. dollar and position adjustments ahead of a crucial U.S. inflation report.
Spot gold was down 0.2% at $4,118.68 per ounce as of 03:15 GMT, marking a 3% drop for the week—its largest weekly percentage decline since mid-May, News.Az reports, citing Reuters.
The dollar index (.DXY) rose for a third consecutive session, making gold more expensive for holders of other currencies.
“A meeting between the U.S. and Chinese leaders stands a decent chance of de-escalating trade tensions, which is aiding the dollar and drying up some safe-haven demand for gold,” said Tim Waterer, Chief Market Analyst at KCM Trade. U.S. President Donald Trump is scheduled to meet Chinese President Xi Jinping next week during a trip to Asia.
Investor focus is now on the U.S. Consumer Price Index (CPI) report, expected to show core inflation holding at 3.1% in September. The report was delayed due to the ongoing government shutdown. Market participants have largely priced in a 25-basis-point rate cut at the Federal Reserve’s upcoming meeting.
“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,” Waterer said. “But any upside surprises in inflation would likely push the dollar higher, which could weigh on gold.”
Gold typically benefits when interest rates are low, as the opportunity cost of holding non-yielding bullion decreases.
Other precious metals also saw movements: spot silver fell 0.6% to $48.62 per ounce, on track for its worst week since March with a 6% drop, while platinum rose 1% to $1,640.98 and palladium slipped 1.1% to $1,441.04.
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