Gold (XAU/USD) remains under pressure on Friday, extending its decline from record highs earlier this week. Sellers continue to dominate, though the downside appears limited ahead of the crucial US Consumer Price Index (CPI) release at 12:30 GMT, which could set the near-term direction for the precious metal.
At the time of writing, gold is trading near $4,060 — down around 1.5% for the day — and is on track to end its nine-week winning streak amid a stronger US Dollar (USD) and stable Treasury yields.
The recent decline largely reflects profit-taking and renewed optimism about easing tensions between the US and China. The White House confirmed on Thursday that US President Donald Trump will meet Chinese President Xi Jinping on October 30 during the APEC Summit in South Korea, helping to calm recent trade concerns.
Despite the pullback, gold’s overall outlook remains positive. The prolonged US government shutdown and ongoing geopolitical and economic risks continue to support demand for safe-haven assets.
Additionally, markets widely expect the Federal Reserve (Fed) to cut interest rates by 25 basis points at its October 29–30 policy meeting. Lower rates tend to boost gold’s appeal as they reduce the opportunity cost of holding the non-yielding metal.
Market focus: US inflation data and trade talks
The US CPI report, delayed due to the ongoing government shutdown, is one of the few key economic indicators available to assess the state of the economy. Headline CPI is projected to rise 0.4% month-on-month in September, matching August’s pace, while the annual rate is expected to edge up to 3.1% from 2.9%. Core CPI — which excludes food and energy — is also forecast to increase by 0.3% on the month and 3.1% year-on-year, unchanged from previous readings.
Traders will also keep an eye on S&P Global’s preliminary October Purchasing Managers Index (PMI) and the University of Michigan’s final Consumer Sentiment Index, both scheduled for release later Friday.
Trade tensions remain in spotlight
Markets continue to monitor developments in US-China relations after recent tensions over China’s expanded export restrictions on rare earth materials. In retaliation, President Trump threatened to impose 100% tariffs on Chinese imports starting November 1, prompting countermeasures from Beijing.
High-level trade discussions between US Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng are taking place in Malaysia on Friday in an effort to ease frictions.
Meanwhile, tensions with Canada escalated after President Trump announced the suspension of all trade negotiations with Ottawa, citing a controversial advertisement aired by Ontario’s provincial government.
