(Bloomberg) — Gold steadied to remain on track for a weekly loss, after hotter-than-expected inflation and a slowdown in the labor market amplified debate over the size of the Federal Reserve’s expected rate cut next month.
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Bullion traded near $2,630 an ounce, following a 0.9% gain in the previous session. That came after separate US reports on Thursday showed underlying inflation rose more than forecast in September, while applications for unemployment benefits last week increased to a more than one-year high.
Swaps markets are pricing in a 25-basis-point cut in November, with traders considering the potential challenges for policymakers as they attempt to keep inflation under control without cooling the jobs market too much. Lower rates typically benefit gold, as it doesn’t pay interest.
The precious metal is up by more than 25% this year as rate-cut optimism has fueled recent gains. Strong central bank purchases and heightened geopolitical tensions have also supported gold, though fears that hostilities in the Middle East could morph into a full-blown regional war have yet to be realized — possibly reducing some haven demand.
Spot gold edged up 0.1% to $2,633.48 an ounce as of 8:02 a.m. in Singapore, on track for a weekly fall of 0.8%. The Bloomberg Dollar Spot Index was flat. Silver was little changed, while platinum and palladium rose.
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