Gold eases losses after mild inflation report but ends nine-week winning streak

[stack of shiny gold bars 3d illustration]
monsitj/iStock via Getty Images

Gold futures fell further on Friday to end the week lower, snapping a nine-week winning streak, after a selloff triggered by profit-taking followed an all-time high for the metal on Monday.

The slump coincided with a large outflow from gold-backed ETFs, which on Wednesday posted the biggest single-day decline in tonnage terms in five months, according to data compiled by Bloomberg.

Gold appeared to stabilize following Friday's release of the U.S. Consumer Price Index report showing inflation rising by a slightly softer than expected 3% Y/Y, which reinforced expectations that the Federal Reserve will cut interest rates next week.

"The precious metals complex appears to be consolidating rather than collapsing," Saxo Bank's Head of Commodity Strategy Ole Hansen said in a note. "The broader narrative [of] gold as a debasement and uncertainty hedge remains intact, but the market needed a cooling‑off period to prevent speculative excess."

"The bull market is far from dead - instead, it's just taking a bit of a breather," according to Pepperstone senior analyst Michael Brown, who sees gold trading in the $4,000-$4,400 range in the near term. "What we've seen in recent trade looks to be the culmination of a parabolic rally that went too far, too fast, and ultimately ended up pulling back in aggressive fashion, as new longs bailed and those who’ve been in the trade for some time sought to book profits."

For the week, front-month Comex gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) for October delivery closed -1.7% to $4,118.40/oz, and front-month Comex silver (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) for October delivery ended -3% to $48.377/oz; on Friday, gold and silver futures both fell ~0.2%.

ETFs: (NYSEARCA:GLD [https://seekingalpha.com/symbol/GLD]), (NYSEARCA:GDX [https://seekingalpha.com/symbol/GDX]), (NYSEARCA:IAU [https://seekingalpha.com/symbol/IAU]), (NYSEARCA:NUGT [https://seekingalpha.com/symbol/NUGT]), (PHYS [https://seekingalpha.com/symbol/PHYS]), (GLDM [https://seekingalpha.com/symbol/GLDM]), (AAAU [https://seekingalpha.com/symbol/AAAU]), (SGOL [https://seekingalpha.com/symbol/SGOL]), (RING [https://seekingalpha.com/symbol/RING]), (BAR [https://seekingalpha.com/symbol/BAR]), (OUNZ [https://seekingalpha.com/symbol/OUNZ]), (SLV [https://seekingalpha.com/symbol/SLV]), (PSLV [https://seekingalpha.com/symbol/PSLV]), (SIVR [https://seekingalpha.com/symbol/SIVR]), (SIL [https://seekingalpha.com/symbol/SIL]), (SILJ [https://seekingalpha.com/symbol/SILJ])

MORE ON GOLD AND GOLD MINERS

* Idaho Strategic Resources: Still Upbeat, Likely As Predicted For Gold [https://seekingalpha.com/article/4833178-idaho-strategic-resources-still-upbeat-likely-as-predicted-for-gold]
* Curveballs: Gold Fever [https://seekingalpha.com/article/4832234-curveballs-gold-fever]
* Gold Steadies Above $4,100 As Traders Eye Inflation Data And Fed Outlook [https://seekingalpha.com/article/4832079-gold-steadies-above-4100-as-traders-eye-inflation-data-and-fed-outlook]