Gold handed back its earlier gains on Friday, falling roughly $50 from the intraday high as traders locked in profits ahead of next week’s Federal Reserve decision.
After touching $4,259 earlier in the session, spot prices eased to around $4,206 by late afternoon, keeping the metal pinned inside the familiar $4,200 to $4,250 range.
The pullback followed an initial jump triggered by softer PCE inflation and another weak run of labour data. The numbers strengthened expectations that the Fed will deliver a quarter-point cut on Wednesday, with futures still pricing an 87% chance of a move. Even so, gold’s failure to hold the breakout level showed that pre-meeting caution remains the dominant theme.
The broader backdrop remains supportive. Core PCE is still drifting towards 3%, small-business hiring has turned negative, and consumer inflation expectations have just fallen to their lowest levels since January. Yet the metal struggled to extend gains as traders waited for the Fed to confirm the policy shift.
Despite today’s dip, gold is set to finish the week broadly unchanged above $4,200. The market still sees the Fed leaning dovish, but until the cut is confirmed, bullion looks content to hover near its recent floor.