Softer CPI Data Locks in Fed Cut, but Gold Fails to Hold Support

Friday’s inflation report came in cooler than expected. Core CPI rose just 0.2% month-over-month and 3.0% annually, reinforcing the view that the Federal Reserve will cut rates by 25 basis points at its October 28–29 meeting. The cut would lower the fed funds range to 3.75%–4.00%, and markets are still leaning toward a second cut in December.

Despite the dovish data, gold couldn’t regain traction. Broader risk appetite picked up as equities rallied on soft inflation and optimism around U.S.–China trade talks. Treasury yields climbed early in the week, and the dollar gained modestly, both contributing to gold’s downside pressure. The inability to hold weekly gains suggests buyers are now waiting for deeper value zones to re-enter.

Fed to Cut Again as Labor Market Takes Center Stage

The Fed’s easing path is now driven by labor market risks rather than inflation. Job creation has slowed sharply, with August’s payrolls missing estimates and prior data revised lower by over 900,000 jobs. Fed Chair Powell has framed the cuts as preemptive — aimed at preserving employment, even if inflation remains slightly above target.

This policy pivot still favors gold in the bigger picture, but right now the market is correcting. Traders are watching whether the Fed adds any signal of continued easing beyond October. If Powell sounds cautious or data-dependent, gold may stay under pressure short-term.

Gold Price Forecast – Reversal Top Sets Stage for Correction

The closing price reversal top is not yet confirmed, but if sellers follow through this week, downside targets come into focus. A 2–3 week correction could unfold, with $3846.50 as the next likely target, followed by the 61.8% retracement at $3720.25. Until those levels are tested or the Fed delivers a strong dovish surprise, gold remains vulnerable to further profit-taking.

More Information in our Economic Calendar.