Gold futures settled lower on Friday as the dollar firmed against major rivals, rebounding from recent losses after a report showed that inflation as measured by the Fed’s preferred gauge surged in September, supporting expectations for a tapering announcement as soon as next week.

Traders looked ahead to the Federal Reserve’s monetary policy, due on Wednesday (November 3). The Fed is widely expected to announce plans to begin scaling back its asset purchase program.

The dollar index climbed to 94.30, gaining more than 1%.

Gold futures for December ended lower by $18.70 or about 1% at $1,783.90 an ounce.

Despite ending the session and the week as well on a negative note, gold futures posted a decent gain in October, after having suffered a loss of about 3% in the previous month.

Silver futures for December ended lower by $0.171 at $23.949 an ounce, while Copper futures for December settled at $4.3680 per pound, down $0.0705 from the previous close.

Data from the Commerce Department showed that the U.S. personal consumption expenditures index grew 4.4% on year, from 4.2% in August. On an annual basis, the core personal consumption expenditures index remained at 3.6% for the fourth straight month.

The data showed personal spending climbed by 0.6% in September after jumping by an upwardly revised 1% in August, while personal income decreased by 1% in September, after inching up by 0.2% a month earlier.

A separate report from the University of Michigan showed the consumer sentiment index for October was upwardly revised to 71.7 from the preliminary reading of 71.4.

Flash data from Eurostat showed earlier today that Eurozone inflation accelerated sharply to the highest since 2008 on higher energy prices, rising to 4.1% in the month, from 3.4% in September. This was also faster than the economists’ forecast of 3.7%.


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