Gold inches down as dollar firms, focus on US inflation data

Gold prices edged lower on Thursday, weighed down by a firmer dollar as investors looked forward to key U.S. inflation data due later this week for more cues on the interest rate path.

Spot gold was down 0.2% at $4,084.29 per ounce, as of 0310 GMT. U.S. gold futures for December delivery climbed 0.9% to $4,100.90 per ounce.

The dollar index rose 0.2% against its rivals, making gold more expensive for other currency holders.

“We’ve seen a correction that is normal after the recent rally in gold and there’s still some downside pressure. We expect prices to consolidate thereafter and continue its uptrend,” GoldSilver Central MD Brian Lan said.

“At this moment, in the longer term we are still bullish on gold, but in the short term investors have got to be cautious because the volatility is big.”

The U.S. Consumer Price Index (CPI) report, due on Friday after a delay due to the government shutdown, is expected to show that core inflation held at 3.1% in September.

Investors have almost fully priced in a 25-basis-point rate cut at the Federal Reserve’s meeting next week.

Gold tends to appreciate when interest rates are low as they reduce the opportunity cost of holding non-yielding bullion.

U.S. President Donald Trump said on Wednesday he expected to reach a trade agreement with Chinese President Xi Jinping and that he would raise concerns about China’s purchases of Russian oil during their meeting in South Korea next week.

Meanwhile, the Trump administration is considering a plan to curb a dizzying array of software-powered exports to China, from laptops to jet engines, to retaliate against Beijing’s latest round of rare earth export restrictions.

Trump imposed Ukraine-related sanctions on Russia for the first time in his second term, targeting oil companies Lukoil and Rosneft.

Gold prices have gained about 56% this year, reaching an all-time peak of $4,381.21 on Monday, bolstered by geopolitical and economic uncertainties, rate-cut bets and sustained central bank buying.

Elsewhere, spot silver fell 0.2% to $48.43 per ounce, platinum slipped 0.6% to $1,612.90 and palladium lost 1.1% to $1,442.70.