Gold prices pared losses on Friday (October 24) after slightly lower-than-expected US inflation data reinforced expectations that the Federal Reserve will cut interest rates next week, but the precious metal is still expected to post its first weekly loss in ten weeks.

Spot gold was steady at $4,125.11 an ounce at 12:05 p.m. ET (1605 GMT), after falling nearly 2% earlier in the session. Prices are down 2.8% for the week. US gold futures for December delivery fell 0.1% to $4,143.20 an ounce.

"Gold and silver jumped on lower-than-expected September core CPI, but it likely wasn't enough to completely dampen this week's sell-off. Price action suggests that gold and, especially silver, need to move lower before consolidating," said Tai Wong, an independent metals trader.

Spot gold hit a record high of $4,381.21 on Monday, but has fallen more than 6% since then, as investors took profits and signs of easing US-China trade tensions dampened demand for safe-haven assets. Spot silver fell 0.3% to $48.77/oz, on track for a weekly decline of about 6%.

Labor Department data showed that US consumer prices rose 3.0% in the 12 months to September, slightly below economists' expectations of 3.1%. Traders are almost fully anticipating an interest rate cut at the US central bank's meeting next week, with another cut expected in December.

Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold. Meanwhile, the White House confirmed on Thursday that US President Donald Trump will meet with Chinese President Xi Jinping next week, ahead of the November 1 deadline for additional US tariffs on Chinese imports.

"If (gold prices) fall below $4,000, we will continue to see a more dramatic decline in the market, possibly down to $3,850, the next major support level," said Phillip Streible, chief market strategist at Blue Line Futures. Bullion prices have risen 55% this year, driven by geopolitical and trade tensions, strong central bank buying, and expectations of a US interest rate cut, among other factors.

Elsewhere, platinum fell 0.6% to $1,616.46, while palladium rose 0.2% to $1,459.25. (alg)

Source: Reuters