Gold Slips 0.75% to $4,387 as Dollar Holds Near Weekly High

Gold gave back a slice of Wednesday's CPI-driven rally on Friday, with the December contract (GC=F) slipping 0.75% to $4,387 as the dollar held near a one-week high and traders trimmed some of the length built into the post-CPI pop. Silver, oil and copper all traded lower on the same tape, with the dollar acting as the swing factor for the metals complex into the weekend.

The move traces straight back to Wednesday's July CPI print, which came in at consensus (headline 3.4% year over year, core 2.5% year over year) and initially sent gold and silver sharply higher on the read that the Fed has less reason to hike in September. That print cut rate hike odds for the September meeting to roughly 48%, per CME FedWatch data cited in Wednesday's wrap. Two sessions later, the metals are working off that spike. I'd call this profit taking after a fast move rather than a change in the underlying story: gold is still trading well above where it started the week even after today's pullback.

Silver followed gold lower, easing to $64.33 on the September contract (SI=F), a smaller retracement in percentage terms than gold's after outperforming on the initial CPI pop. The gold to silver ratio has ticked back up from its post-CPI compression, which tells me some of silver's relative strength faded once the immediate catalyst passed. Watch $64 on SI=F as the near-term level; a close below it would put the CPI rally's gains at real risk.

Oil held a narrower range. WTI crude (CL=F) traded at $81.98 and Brent (BZ=F) at $87.79, both roughly flat, with the geopolitical premium tied to the Strait of Hormuz disruption still doing more work on price than today's dollar move. Copper (HG=F) eased to $6.58 per pound, a modest 0.41% pullback that looks more like tracking the broader metals tape than a fresh signal on the COMEX-LME spread.

The dollar is the variable to watch into next week. The dollar index sitting near a one-week high after Wednesday's data is the mechanical explanation for today's across-the-board pullback in dollar-denominated commodities; if that strength holds through next week's PPI print, expect gold and silver to stay on the back foot near term.

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