Gold prices retreated on Friday, slipping from five-week highs as traders pared positions ahead of key United States inflation data. The move comes after three straight days of gains that lifted the precious metal near $3,423 per ounce on Thursday.
By 3:10 pm AEST (5:10 am GMT), spot gold was down $8.58, or 0.3%, at US$3,408.64 per ounce.
The decline coincided with a rebound in the U.S. dollar, which recovered during Asian trading hours as investors adjusted ahead of the release of the core personal consumption expenditures (PCE) price index.
Still, concerns surrounding the Federal Reserve’s independence have capped the dollar’s upside, keeping gold in a consolidative range near recent highs.
U.S. Vice President JD Vance told USA Today on Thursday that the Fed’s autonomy had effectively ended, a statement that weighed on the greenback.
Doubts deepened further after Fed Governor Lisa Cook filed a lawsuit on Thursday against President Donald Trump’s attempt to dismiss her.
Meanwhile, dovish signals from policymakers also limited dollar strength. Fed Governor Christopher Waller said he would support an interest-rate cut at the September meeting and backed further reductions in the next three to six months to prevent a deterioration in the labour market.
Market expectations for a September rate cut remain at around 85.2%, according to the CME Group FedWatch Tool.
Attention now shifts to the Fed’s preferred inflation gauge, the core PCE price index. Markets expect the measure to tick up to 2.9% year-on-year and hold steady at 0.3% month-on-month for July.
