Gold price: First weekly loss in nine weeks as dollar strengthens, traders await US inflation data

Gold prices slipped on Friday, heading for their first weekly decline in nine weeks, as a stronger U.S. dollar and investor caution ahead of key inflation data weighed on sentiment. According to Reuters, spot gold fell 0.2% to $4,116.09 per ounce as of 0504 GMT, while U.S. gold futures for December delivery were down 0.4% at $4,131.10 per ounce.

After a spectacular rally that pushed prices to record highs earlier this month, bullion has fallen about 3% so far this week, its steepest drop since mid-May, as traders booked profits. The US dollar index strengthened for a third straight session, making gold costlier for overseas investors and curbing demand.

Tim Waterer, Chief Market Analyst at KCM Trade, told Reuters that optimism over improving U.S.-China relations is supporting the dollar and reducing gold’s safe-haven appeal. “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,” he said.

Inflation and Fed outlook

The US Consumer Price Index (CPI) report, expected later in the day, is now the market’s main focus. Economists expect core inflation to hold steady at 3.1% in September, according to Reuters. The data, delayed by the U.S. government shutdown, will help shape expectations ahead of next week’s Federal Reserve policy meeting, where traders have nearly priced in a 25-basis-point rate cut.

“From gold’s perspective, a tame CPI print would be welcomed as it keeps the Fed on track to cut rates twice before year-end,” Waterer noted. “However, any upside surprise in inflation could push the dollar higher, to the detriment of gold.”

Gold typically performs well in a low-interest-rate environment, as it reduces the opportunity cost of holding non-yielding assets. A stronger inflation reading, however, could delay rate cuts, strengthening the dollar and prolonging gold’s correction.

ETF outflows

Analysts said the current pullback is largely technical, coming after a sustained rally. Gold-backed exchange-traded funds (ETFs) recorded their largest single-day decline in holdings in five months, signaling institutional investors are rebalancing portfolios.

“Gold prices fell to around $4,110 per ounce on Friday, pressured by profit-booking and renewed optimism about a U.S.-China trade thaw,” said Jigar Trivedi, Senior Research Analyst at Reliance Securities. He added that the metal’s 5% intraday drop earlier this week was its sharpest in five years.

Trivedi expects MCX Gold December to fall toward ₹1,23,000 per 10 grams in the near term but emphasized that gold remains up over 50% year-to-date, supported by safe-haven demand and expectations of further Fed rate cuts.

Long-term bullish outlook

Market sentiment remains cautious ahead of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping next week, which could ease trade tensions and reduce gold demand in the short term.

However, analysts warn that geopolitical risks—especially the U.S. imposing new sanctions on Russia—could continue to inject volatility into global markets. “Any escalation in sanctions or geopolitical flashpoints could help gold find support,” said Darshan Desai, CEO of Aspect Bullion & Refinery.

Despite near-term weakness, JPMorgan remains bullish on gold, forecasting an average price of $5,055 per ounce by Q4 2026 and a long-term target of $6,000 by 2028. The bank expects continued central-bank buying and portfolio diversification into gold to sustain demand.

“Gold remains our highest-conviction long for the year,” said Natasha Kaneva, Head of Global Commodities Strategy at JPMorgan. “The recent correction is a healthy consolidation after rapid gains.”

Other precious metals

Elsewhere in the metals market, silver fell 0.5% to $48.67 per ounce, on track for a 6% weekly loss, while platinum rose 0.3% to $1,630.60 and palladium dropped 1.8% to $1,430.35.

Analysts broadly agree that the current weakness in gold is a pause, not a reversal. With inflation uncertainty, monetary easing expectations, and geopolitical risks still looming, most foresee the long-term uptrend in gold remaining intact.

For now, all eyes are on the U.S. CPI data. A softer print could reignite the rally by boosting rate-cut hopes, while a hotter reading could deepen the short-term correction. Either way, analysts say gold’s long-term shine is far from dimmed.