Gold drops 1% on hawkish Fed comments ahead of US inflation data
GLD•Gold fell more than 1% after hawkish comments from Federal Reserve Governor Christopher Waller, ahead of US inflation data. Spot gold was down 1.6% to $4,071.07 per ounce, while traders priced in about a 99% chance of a December rate hike.
1. Gold falls on Fed remarks
Gold prices fell more than 1% on Tuesday after Federal Reserve Governor Christopher Waller said aggressive monetary policy may be needed if inflation continues to rise. Spot gold was down 1.6% to $4,071.07 per ounce by 1153 GMT, while US gold futures for December delivery fell 0.9% to $4,079.80.
2. Inflation data in focus
Waller said the Fed should raise short-term borrowing costs next month even if government data shows inflation cooled last month, and should consider a half-point hike if inflation worsens. Traders saw about a 99% probability of a December rate increase after his comments. US consumer price data was due at 1330 GMT, with producer price figures due on Friday. Higher interest rates tend to reduce the appeal of non-yielding gold.
