By: Economy Middle east

Gold prices slipped on Friday and were poised for their first weekly decline in ten weeks, pressured by a stronger U.S. dollar as investors adjusted positions ahead of a key U.S. inflation report due later in the day.

In Dubai, gold rates declined, with 24-carat gold losing AED3.75 to AED495.5 and 22-carat gold falling AED3.5 to AED458.75. Additionally, 21-carat gold declined AED3.25 to AED440, and 18-carat gold ticked down AED2.75 to AED377.

Globally, spot gold fell 0.44 percent to $4,111.42 per ounce as of 5:32 GMT, while U.S. gold futures for December delivery eased 0.41 percent to $4,128.50 per ounce.

Bullion has lost 3 percent so far this week, on track for its largest weekly loss since mid-May.

U.S. dollar rises amid prospects of easing trade tensions

The U.S. dollar index rose for the third consecutive session, making gold prices more expensive for other currency holders. The upcoming meeting between the U.S. and Chinese presidents is likely to ease trade tensions, lending support to the dollar and reducing safe-haven demand for gold.

The White House said on Thursday that U.S. President Donald Trump will meet Chinese President Xi Jinping next week during his trip to Asia. Trade tensions between Washington and Beijing have been intensifying in recent weeks, with both sides announcing a series of retaliatory measures.

U.S. inflation report to reinforce rate cut expectations

Market attention is now turning to the U.S. Consumer Price Index (CPI) report, which is expected to show core inflation steady at 3.1 percent in September. The release has been delayed due to the government shutdown. Markets have almost fully priced in a 25-basis-point rate cut at the Federal Reserve’s meeting next week.

From gold’s standpoint, a subdued CPI reading would be positive, as it would reinforce expectations for the Federal Reserve to deliver two more rate cuts before the end of the year, analysts said. However, a stronger-than-expected inflation figure could boost the dollar further, weighing further on gold prices.

Gold typically benefits from lower interest rates, as they reduce the opportunity cost of holding non-yielding assets.

Gold prices to average $5,055 per ounce by late 2026

On Thursday, JP Morgan analysts reiterated a bullish outlook for gold, projecting that prices could average $5,055 per ounce by the fourth quarter of 2026. The forecast is underpinned by assumptions of strong demand, with investor purchases and central bank buying expected to total around 566 tons per quarter in 2026, the bank said in a note.

JP Morgan analysts said gold’s upside is supported by a combination of the Federal Reserve’s rate-cutting cycle, stagflation concerns, questions over Fed independence, and broader hedging against currency debasement. They also noted that the recent market pullback is a healthy consolidation, reflecting the market digesting rapid gains since August.

The analysts reiterated a long-term target of $6,000 per ounce by 2028, emphasizing that gold should be viewed over a multi-year horizon. Spot gold has hit multiple record highs this year, most recently reaching $4,381.21 on Monday, representing a nearly 57 percent year-to-date gain and setting the stage for its strongest annual performance since 1979.

Other precious metals

As gold prices declined on Friday, the precious metals market saw mixed movement. Spot silver dipped 0.65 percent to $48.60, while platinum gained 0.45 percent to $1,632.95. Meanwhile, palladium slid 1.64 percent to $1,433.13.