Gold Falls as Hot Inflation Figures, Higher Dollar Weigh
Hotter-than-expected October inflation lifted odds of a bigger December Federal Reserve hike and pushed the dollar higher, pressuring non-yielding bullion.
- Gold prices fell on Thursday, trading below $4,000 an ounce as higher yields from The Treasury pressured the precious metal. Prices touched their lowest level since November 4.
- Stronger-than-Expected United States inflation data showing a 0.4% rise in October, combined with hawkish remarks from Federal Reserve officials, cemented expectations of a December rate hike.
- Market participants currently price a 25-basis-point Fed rate increase at 85.5%, up from 79.5% on November 9, while bets on a 50-basis-point increase rose to 13.2%.
- The dollar hit its highest level since May 2025, making greenback-priced bullion more expensive for international buyers and further dampening investor demand.
- Despite headwinds, analysts at OCBC noted, "we are not turning bearish on its medium-term prospects." Central-bank buying in the third quarter has helped provide a price floor.
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Higher than expected US inflation data slow the recovery in gold prices. Which support zone counts now, which resistances await and how the interest rate expectations determine the direction.
Gold falls to over one-week low on firm dollar, Fed rate hike bets
By 0022 hours Greenwich time, the price of gold in instant transactions fell 0.2% to $3979.09 per ounce, and American futures for gold dropped 0.4% to $3984.50. For other precious metals, the price of silver in instant transactions dropped 0.6% to $51.40 per ounce and the price of the country's 0.3% to $1024.48.
At the beginning of Thursday's dealings, gold prices declined slightly, affected by the dollar's rise to nearly its highest level in a month, following the issuance of inflationary statements by the United States that exceeded expectations, and statements by officials of the Federal Reserve that tended to tighten monetary policy.
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