Gold prices erased early losses on Friday, edging over 0.10% higher after US inflation data suggested the Federal Reserve remains on track to cut interest rates next week. XAU/USD climbed to $4,127 after rebounding from a daily low of $4,043, supported by a slightly softer-than-expected September Consumer Price Index (CPI) report that offered little resistance to the Fed’s easing path.
Bullion climbs above $4,100 as traders bet on dovish Fed
Market expectations for a rate cut at the Fed’s October 28–29 meeting surged to 96%, according to the Prime Market Terminal interest rate probability tool. Softer inflation, combined with lingering uncertainty in the global outlook, bolstered safe-haven demand for bullion.
Data from S&P Global showed that US business activity continued to accelerate in October, while the University of Michigan’s Consumer Sentiment Index deteriorated more than initially estimated, reflecting weaker consumer confidence.
On the geopolitical front, the White House confirmed that US President Donald Trump will meet Chinese President Xi Jinping in South Korea next week ahead of the November 1 tariff deadline. In addition, Trump announced new sanctions targeting Russian energy giants Lukoil and Rosneft, further heightening geopolitical tensions — a supportive factor for gold.
So far in 2025, bullion has surged 55%, driven by rising geopolitical risks, steady central bank purchases, and expectations of multiple Fed rate cuts.
Daily market movers: gold gains despite mixed market signals
Gold prices advanced even as the US Dollar Index (DXY) ticked up 0.03% to 98.94. Meanwhile, US Treasury yields eased, with the 10-year note falling 1.5 basis points to 3.989%. Real yields — which move inversely to gold — declined to 1.689%, reinforcing the metal’s appeal.
The US CPI rose 3.0% year-over-year in September, below forecasts of 3.1% but slightly higher than August’s 2.9%. Core CPI, excluding food and energy, also increased 3.0%, a tenth lower than in the prior month. S&P Global’s flash PMI data revealed the second-fastest pace of US business expansion this year, with manufacturing PMI rising to 52.2 and services PMI jumping to 55.2, the highest in three months.
The University of Michigan revised October’s consumer sentiment down to 53.6 from the preliminary 55.0 reading, while inflation expectations for one year dipped to 4.6% and the five-year outlook rose to 3.9%.
In a research note, JPMorgan projected that gold could average $5,055 per troy ounce by Q4 2026, assuming central bank demand and investor flows remain strong at around 566 tonnes per quarter through next year.
Technical outlook: gold stabilizes above $4,100, eyes $4,200 resistance
Gold’s uptrend remains intact after the metal briefly slipped below the 20-day Simple Moving Average (SMA) at $4,056. The Relative Strength Index (RSI) still signals bullish momentum, though buyers face key resistance before resuming the rally.
Immediate resistance is seen at the October 22 high of $4,161, followed by $4,200, $4,250, and $4,300. A breakout above these levels could open the path toward the all-time high at $4,380. On the downside, initial support lies at $4,100, followed by the October 8 high at $4,059, and then the October 22 low at $4,004.
