Gold prices steadied near US$4,100 an ounce during Friday's Asian trade, pausing their earlier rebound as traders awaited key catalysts, including the upcoming United States-China trade talks and the release of U.S. inflation data.
By 4:30 pm AEDT (5:30 am GMT), spot gold was down 0.3% at US$4,111.77 per ounce, bringing weekly declines to about 3.4%.
Gold’s upward momentum stalled as the U.S. dollar and Treasury yields climbed, supported by firming inflation expectations and a recent surge in oil prices following new U.S. sanctions on Russia’s top energy producers.
The measures heightened global supply fears and reignited concerns about higher costs feeding through to inflation.
The next major directional cues for gold are expected from the outcome of U.S.-China trade talks in Malaysia and the September U.S. consumer price index (CPI) report.
Top officials from both nations are meeting for their fifth round of discussions aimed at easing tensions over rare earth exports and technology access.
The talks are also expected to set the stage for a potential meeting between Presidents Donald Trump and Xi Jinping during next week’s APEC Summit.
Meanwhile, markets are expecting U.S. CPI to rise 3.1% in September, up from 2.9% in August. Core CPI, which excludes volatile food and energy prices, is forecast to remain unchanged at 3.1% year-on-year.
A hotter-than-expected inflation reading could challenge expectations of another 25-basis-point rate cut by the Federal Reserve in December, following an anticipated reduction in October.
Such an outcome would likely bolster the dollar and weigh further on non-yielding assets like gold.
