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Gold prices edged lower in Asian trading on Friday, marking what is expected to be their first weekly decline in 10 weeks, as investors engaged in profit-taking following the metal’s recent surge to all-time highs. The pullback comes as the market awaits the delayed release of crucial U.S. inflation data and digests signs of easing U.S.-China trade tensions.
Spot gold was last trading down 0.4% at $4,109.55 an ounce, while U.S. Gold Futures fell 0.5% to $4,123.70. After hitting an unprecedented high of $4,381.29/oz earlier in the week, bullion is set to record a weekly loss of more than 3%, interrupting a powerful nine-week rally driven by expectations of global monetary easing and strong safe-haven demand.
Inflation and Geopolitics: A Tussle for Sentiment
Investor focus is sharply tuned to two major catalysts:
- U.S. CPI Data: Traders adopted a cautious stance ahead of the U.S. Consumer Price Index (CPI) for September, which was delayed due to the government shutdown. This data is considered crucial for refining expectations for the Federal Reserve’s policy meeting next week, where markets are currently pricing in a 25-basis-point rate cut. A softer-than-expected CPI reading would reinforce bets on monetary easing, providing potential support to non-yielding gold. Conversely, a hotter inflation print could bolster the dollar and Treasury yields, weighing heavily on bullion prices.
- Trump-Xi Meeting: Sentiment took a minor hit from geopolitical easing after the White House confirmed President Donald Trump will meet Chinese President Xi Jinping next week. Hopes for a thaw in trade relations between the world’s two largest economies led to a brief shift away from safe-haven assets.
The dollar held firm on Friday, making the commodity more expensive for international buyers and adding pressure to gold’s valuation.
Metals Markets Subdued Despite China’s Outlook
Broader metals markets displayed caution. Silver Futures dropped 1% to $48.13 per ounce, while Platinum Futures remained steady. Benchmark Copper Futures on the London Metal Exchange slipped 0.5%, although U.S. Copper Futures saw a modest gain.
Underpinning demand for industrial metals, however, was China’s domestic policy outlook. The Communist Party unveiled a new five-year economic plan emphasizing advanced manufacturing, technological self-reliance, and stronger domestic demand, reinforcing optimism about China’s commitment to sustained, structurally-driven growth.
Despite the short-term profit-taking, analysts maintain that gold’s longer-term outlook remains constructive, supported by the persistent expectation of lower U.S. interest rates and ongoing, underlying global geopolitical uncertainties.
