Gold drops 1% on hawkish Fed comments ahead of US inflation data
GLD•Gold fell more than 1% after Fed Governor Christopher Waller said tougher action may be needed if inflation worsens. Spot gold was down 1.5% at $4,078.53 an ounce, while traders priced in a 99% chance of a December rate hike ahead of US CPI data.
1. Gold falls on rate outlook
Spot gold fell 1.5% to $4,078.53 per ounce by 1025 GMT on Tuesday, while U.S. gold futures for December delivery slipped 0.7% to $4,086.30. Fed Governor Christopher Waller said the Fed should raise short-term borrowing costs next month and consider a half-point increase if the inflation picture worsens.
2. Inflation data in focus
Traders priced in about a 99% probability of a December rate hike after Waller's comments. U.S. consumer price data was due at 1330 GMT, with producer price figures due Friday. Higher interest rates tend to reduce the appeal of non-yielding gold.
3. Other metals decline
Spot silver fell 1.9% to $52.42 an ounce, platinum dropped 1.1% to $1,560.08, and palladium declined 0.51% to $1,036.24.
