Gold (XAU/USD) edged lower on Friday as investors turned cautious ahead of the highly anticipated US Consumer Price Index (CPI) report, which could set the near-term direction for the metal. At the time of writing, XAU/USD was trading around $4,060, down nearly 1.5% on the day and on track to end a nine-week winning streak amid a firmer US dollar and steady Treasury yields.
Profit-taking and easing trade tensions weigh on gold
The metal’s pullback from record highs earlier this week has been largely attributed to profit-taking and a partial easing of US-China trade tensions. The White House confirmed that President Donald Trump will meet Chinese President Xi Jinping on October 30 on the sidelines of the APEC Summit in South Korea—a development that helped calm markets after recent tariff threats.
Despite the correction, the broader backdrop for gold remains supportive. The ongoing US government shutdown and persistent geopolitical uncertainty continue to bolster safe-haven demand. Meanwhile, expectations that the Federal Reserve will deliver a 25-basis-point rate cut at its October 29–30 policy meeting are helping cushion the downside. Lower rates tend to enhance the appeal of non-yielding assets such as gold by reducing the opportunity cost of holding them.
Focus shifts to US CPI and trade headlines
With much of the US economic calendar frozen by the government shutdown, Friday’s CPI release has taken on greater significance as one of the few key data points available. Markets expect headline inflation to rise 0.4% month-on-month in September, matching August’s pace, while the annual rate is projected to edge up to 3.1% from 2.9%. Core CPI, which excludes food and energy, is forecast to increase 0.3% on the month and 3.1% year-over-year.
Investors will also watch the S&P Global preliminary PMI readings for October and the University of Michigan’s final Consumer Sentiment Index, both due later in the day.
Trade developments remain another key driver for sentiment. High-level talks between US Treasury Secretary Scott Bessent, US Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng are set to take place in Malaysia on Friday, following a renewed flare-up in tensions earlier this month over China’s rare earth export restrictions.
In parallel, President Trump announced that the US is terminating all trade negotiations with Canada, citing a recent political dispute—further adding to market volatility.
Technical outlook: sellers hold control below $4,150
From a technical perspective, gold has entered a consolidation phase following its parabolic rally. XAU/USD now trades below the 21-, 50-, and 100-period Simple Moving Averages (SMAs) on the 4-hour chart, signaling weakening bullish momentum.
Immediate support is seen at the $4,000 psychological level, where dip buyers have recently emerged. A clear break below this area could open the door toward $3,900. On the upside, resistance lies near the 100-SMA at $4,090, followed by $4,150. A sustained move above $4,150 would expose the $4,200 region, though strong selling interest is likely to reappear unless bulls stage a decisive breakout.
