Gold Climbs Well Off Worst Levels But Still Closes Modestly Lower

(RTTNews) - After coming under pressure early in the session, the price of gold regained some ground over the course of the trading day on Friday.

Gold for October delivery climbed well off its worst levels of the day but still closed down $7.10 or 0.2 percent at $4,118.40 an ounce. The price of gold tumbled by as much as 1.2 percent in early trading.

Largely reflecting the sharp pullback seen during trading on Tuesday and Wednesday, gold slumped by 1.7 percent for the week, snapping a nine-week winning streak.

The recovery attempt by gold came following the release of a closely watched report on consumer price inflation that increased confidence the Federal Reserve will continue cutting interest rates in the coming months.

While most U.S. economic data has been postponed indefinitely due to the ongoing government shutdown, the Labor Department released a report this morning showing consumer prices increased by slightly less than expected in the month of September.

The Labor Department said its consumer price index rose by 0.3 percent in September after climbing by 0.4 percent in August. Economists had expected consumer prices to rise by another 0.4 percent.

The report also said the annual rate of growth by consumer prices ticked up to 3.0 percent in September from 2.9 percent in August, although that was slower than the 3.1 percent jump expected by economists.

Excluding food and energy prices, the core consumer price index crept up by 0.2 percent in September after rising by 0.3 percent in August. Core consumer prices were expected to increase by another 0.3 percent.

The Labor Department also said the annual rate of growth by core consumer prices slowed to 3.0 percent in September from 3.1 percent August. Economists had expected the pace of growth to remain unchanged.

"Consumer inflation came in cooler in September, reinforcing expectations that the Fed will cut rates again at next week's policy meeting," said Nationwide Chief Economist Kathy Bostjancic.

She added, "We remain of the view that the Fed will cut the fed fund rate by another 50bps by year-end as the weakening in the labor market outweighs concerns about moderately higher inflation stemming mostly from the tariffs."

Gold came under pressure early in the session amid optimism trade talks between the U.S. and China will help alleviate recent sessions.

Beijing and Washington "can totally find ways to resolve each other's concerns," China's commerce minister said after the White House confirmed plans for President Donald Trump to meet with Chinese leader Xi Jinping next week.