Gold is declining for the third day and is approaching the $4,000 level

Gold prices fell on Thursday, affected by the rise in the dollar. As investors look to key US inflation data scheduled for release later this week, looking for more indications on the path of interest rates.

The spot gold price fell by 0.2 percent, reaching $4,084.29 per ounce, as of 03:10 GMT. US gold futures for December delivery rose 0.9 percent to reach $4,100.90 an ounce.

The dollar index rose 0.2 percent against competing currencies, making gold more expensive for holders of other currencies.

Brian Lane, general manager of Gold Silver Central, said: “We have seen a natural correction after the recent rise in gold prices, and there is still some downward pressure. We expect prices to stabilize after that and continue their upward trend.” He added: “At the present time, in the long term, we are still optimistic about gold, but in the short term, investors should be cautious due to the severity of volatility.”

The US Consumer Price Index report, due for release on Friday after being delayed due to the government shutdown, is expected to show that core inflation held steady at 3.1 percent in September.

Investors have almost factored in a 25 basis point rate cut at next week’s Federal Reserve meeting.

Gold tends to rise when interest rates are low, because they reduce the opportunity cost of holding non-yielding bullion.

On Wednesday, US President Donald Trump said he expects to reach a trade agreement with Chinese President Xi Jinping, and that he will raise concerns about China’s purchases of Russian oil during their meeting in South Korea next week.

Meanwhile, the Trump administration is considering a plan to rein in a vast array of software-driven exports to China, from laptops to aircraft engines, in response to Beijing’s latest round of restrictions on the export of rare earth metals.

Trump imposed sanctions on Russia related to Ukraine for the first time in his second term, targeting the oil companies Lukoil and Rosneft.

This year, gold prices have risen by about 56 percent, reaching an all-time high of $4,381.21 on Monday, supported by geopolitical and economic uncertainty, bets on interest rate cuts, and continued central bank buying.

In other markets, the spot price of silver fell by 0.2 percent to reach $48.43 per ounce, platinum fell by 0.6 percent to reach $1,612.90, and palladium lost 1.1 percent to reach $1,442.70.