Gold is headed for its first weekly loss after a sustained rally since August

Gold is set to end a 9-week winning streak after the market saw a major corrective move in prices following a reassessment of the upside wave that pushed the metal into the overbought range. The price of gold pared its losses today after the release of the better-than-expected US inflation report, bolstering markets’ bets on further monetary easing by the US Federal Reserve. Bond yields fell as traders anticipated a high probability of implementing two rate cuts before the end of the year, a move that usually supports gold as it is a non-interest-bearing asset. Gold is a safe haven Investors continue to monitor opportunities for improved relations between the United States and China, with US President Donald Trump and Chinese President Xi Jinping preparing to meet next week in an attempt to defuse the escalating trade war. Any deal would ease the geopolitical tensions that have driven demand for safe-haven assets like gold. Also Read: Don’t forget that gold is not a risk-free investment. The bullish wave began in mid-August and pushed prices to a record high of $4,381.52 an ounce last Monday, before abruptly stopping the next day as investors took profits. The decline coincided with a large exit by gold-backed exchange-traded funds, which yesterday recorded the biggest daily drop in asset volume in 5 months, according to data compiled by Bloomberg. “The correction appears to be setting in, but broad participation from retail investors means volatility levels are likely to remain high,” said Charu Chanana, strategist at Saxo Capital Markets. “The next major resistance level is near $4,148, but a confirmed break above $4,236 will be needed.” To confirm the return of upward momentum.” Gold’s rally has risen about 57% since the start of this year, supported by central bank purchases and what is known as the “depreciation trade,” as investors shun government debt and currencies to protect themselves from the worsening financial deficit. Expectations of easy monetary policy have also increased the attractiveness of gold, which does not generate returns. On the other hand, platinum jumped up to 2% before paring its gains, as the London Metal Exchange is showing signs of a significant shortage of supplies, with prices rising to a premium of more than $70 an ounce over New York contracts the day before yesterday. Lending rates also jumped, in moves similar to what happened in the silver market after the liquidity crisis earlier this month. Aaron Brown: The current gold rush has nothing to do with inflation…nor with gold. Spot gold fell 0.4% to $4,108.27 an ounce at 9:56 a.m. New York time, while silver fell — hitting a record high above $54 an ounce last week — on its way to a weekly loss of more than 6%. As for the Bloomberg Dollar Spot Index, it remained nearly stable, while platinum fell and palladium was little changed.