Gold Falls for the First Time in Ten Weeks Amid Expectations of U.S. Interest Rate Cuts
Gold prices experienced a significant decline at the close of trading on Friday, October 24, marking the first weekly loss after ten consecutive weeks of gains, amid U.S. data showing a slight slowdown in inflation and increasing expectations of a potential interest rate cut by the Federal Reserve next week.
Gold fell in spot transactions by 0.2% to reach $4115.03 per ounce, after dropping nearly 2% during the session. Over the week, the yellow metal recorded a loss of 3.1%. U.S. gold futures for December delivery also declined by more than 0.4% to close at $4126.90 per ounce.
Independent metals trader Tai Wong commented on the market movement, saying: "The price of gold and silver increased after the core consumer price index reading came in below expectations in September, but it seems that this will not be enough to completely erase the impact of the selling wave this week." He added: "The price movement indicates that gold, and even more so silver, needs further decline before reaching a stable price range."
Gold had reached an all-time high of $4381.21 on Monday before falling by more than 6% due to profit-taking and a decline in demand for safe havens as signs emerged of easing trade tensions between the U.S. and China.
In a related context, U.S. President Donald Trump imposed new sanctions on the Russian companies "Rosneft" and "Lukoil" linked to the war in Ukraine, in a move described by observers as the toughest of its kind against Russian companies since the outbreak of the conflict. The White House also announced that Trump will meet with Chinese President Xi Jinping next week during an Asian tour, increasing market anticipation amid ongoing trade tensions between the two countries.
U.S. Labor Department data revealed that consumer prices rose by 3.0% during the twelve months ending in September, which was slightly below economists' expectations of a 3.1% increase. This relative slowdown in inflation has bolstered investor expectations for an interest rate cut at the upcoming Federal Reserve meeting, with further cuts likely in December. A decrease in interest rates is a stimulating factor for gold, as it reduces the opportunity cost of holding non-yielding assets.
As for other precious metals, platinum rose by 0.6% to reach $1635.59 per ounce, while palladium fell by 0.3% to record $1453.16. In terms of silver, it declined in spot transactions by 0.86% to reach $48.50 per ounce, marking a weekly loss of over 6%.
