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Spot gold declined 0.5 percent to $4,327.80 an ounce in morning trade while US gold futures for December delivery dropped 1 percent to $4,368.60 an ounce, according to Reuters. The move extended a third consecutive weekly decline for the metal as investors weighed fresh evidence of persistent price pressures in the world’s largest economy. Reuters reported that the drop came after oil prices climbed, adding to fears that inflation could remain elevated heading into the Federal Reserve’s policy meeting.
Underlying US inflation rose in August with the core consumer price index increasing 0.3 percent from the prior month, data released on Friday showed, a Bloomberg assessment found. The figures bolstered the chance of a rate increase when policymakers convene, with markets now pricing in a higher probability of tightening. Gold, which offers no yield, typically comes under pressure when interest rates rise as alternative assets become more attractive to investors.
Bullion has shed more than $1,600 an ounce from its record peak above $5,500 set in January 2026, Kitco News data shows. Central banks have provided a key pillar of support for prices even as investor demand through exchange-traded funds has weakened, according to a June analysis by Deutsche Bank that projected average prices of $4,300 in the third quarter. The bank noted that outflows from gold-backed funds reflected reduced investor interest amid shifting monetary policy expectations.
The Federal Reserve’s preferred inflation gauge and other upcoming data will likely influence the pace of any policy adjustment, Reuters indicated in its coverage of trader positioning. A firmer dollar, which gained on the inflation numbers, has also weighed on dollar-denominated commodities by making them more expensive for overseas buyers. Industry participants continue to monitor support levels near $4,300 an ounce where systematic selling could accelerate, a TD Securities note reviewed by Kitco News warned.
Gold’s performance this year reflects a sharp reversal from earlier gains driven by de-dollarisation flows and fiscal concerns in major economies. The metal reached an all-time high of $5,589.38 per ounce in late January before entering a corrective phase, GuruFocus historical records show. Despite the recent pullback, long-term demand from emerging-market central banks has remained resilient through periods of volatility.
Comex gold futures settled the previous session with modest losses while silver also traded lower, mirroring the broader precious metals complex, Bloomberg figures show. Market participants await further signals from US officials on the balance between inflation control and economic growth as the year progresses. The current environment has prompted several banks to revise their 2026 price forecasts downward from earlier projections that anticipated sustained rallies above $5,000.
