Gold drops over 1% as hot US inflation data boosts Fed hike bets
GLD•GLD•GLD•GLD•Spot gold fell 1.6% to $4,091.06 an ounce after US consumer prices rose 0.6% in September, increasing market expectations of a Federal Reserve rate hike. Traders saw a 42% chance of a rate increase this month, up from 22% before the data.
Spot gold fell 1.6% to $4,091.06 per ounce by 11:30 a.m. EDT, its lowest level since October 7, extending losses for a third straight session. US gold futures for December delivery fell 1.5% to $4,112.90 per ounce.
The US consumer price index rose 0.6% in September after increasing 0.4% in August. The dollar index climbed 0.7% and 10-year Treasury yields rose after the data. Markets priced in a 42% chance of a US rate hike this month, up from about 22% before the inflation reading, and a 93% probability of an increase in December.
Higher interest rates tend to reduce the appeal of non-yielding bullion. Spot silver fell 5.6% to $56.13 per ounce, platinum dipped 3.3% to $1,609.19 and palladium fell 2.3% to $1,100.22.
