Gold price today: gold edge lower as traders eye US CPI data

Gold price extended its losses for the sixth consecutive day after the Federal Reserve (Fed) revealed its September Meeting Minutes. The Minutes showed that the “substantial majority” of the Federal Open Market Committee (FOMC) backed a 50-basis-point (bps) cut. Despite this, the XAU/USD trades within familiar levels near $2,610, down over 0.37%.

Gold prices pressured ahead of US CPI

The US CPI data is anticipated to drop from 2.5% to 2.3% year-over-year. The monthly CPI is expected to be 0.1%, down from 0.2%. Core CPI is projected to hold steady at August’s rate of 3.2% year-over-year, with the September monthly figure likely decreasing from 0.3% to 0.2%.

Additional data will include Initial Jobless Claims for the week ending October 5, with estimates suggesting that 230,000 individuals applied for unemployment benefits, slightly above the previous reading of 225,000.

Following Friday's Non-Farm Payroll (NFP) report, Federal Reserve officials are adopting a more cautious stance. Vice Chair Philip Jefferson indicated his approach is "meeting by meeting" and guided by data. Meanwhile, Boston Fed President Susan Collins anticipates further rate cuts, contingent on incoming economic data.

Traders' focus shifts to economic data

US Treasury yields continued to climb, with the US 10-year Treasury note reaching 4.062%, an increase of five and a half basis points. This rise supported the Greenback, pushing the US Dollar Index (DXY) up 0.42% to 102.90, marking its highest level since mid-August 2024.

Attention now turns to Thursday's release of the US Consumer Price Index (CPI), with estimates indicating that inflation is expected to trend lower. However, if inflation exceeds expectations, it could lead to a pause in the Fed’s easing cycle.

The US economic calendar for the week includes data on inflation, employment figures, and appearances by Fed officials.

Following the last US jobs report, recession fears faded. Therefore, most Wall Street banks like Citi, JPMorgan and Bank of America revised their November Fed call from a 50 to 25 bps rate cut.

Meanwhile, the People’s Bank of China (PBoC) halted its Bullion purchases for the fifth month. China’s reserves were unchanged as they stood at 72.8 million troy ounces at the end of last month.

Global uncertainty may push gold to new all-time highs

Among sources of uncertainty today are geopolitical tensions — which escalated over recent days with Israel’s deadly strikes in Lebanon. And the ongoing wars in Gaza and Ukraine have continued to fuel fears about the future worldwide.

In the near future, people are considering “any case of turbulence in the economy,” FxPro senior market analyst Michel Saliby explained. “This is why they’re keeping a decent portion of gold in their portfolio as a ‘safe haven.’”

Analysts highlight robust demand from central banks globally as a key factor. Joe Cavatoni, a senior market strategist at the World Gold Council, noted last month that central bank purchases were significantly above the five-year average, indicating “increased concern over inflation and economic stability.”

Recent stimulus measures in China designed to enhance consumer spending are expected to drive retail investments, according to Saliby, further supporting gold's performance.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.