Gold extends losses to one-week low as dollar rallies on Fed hike bets
GLD•Gold fell for a third straight session, with spot prices down 1.4% to $3,931.54 an ounce after hitting their lowest level since November 4. A stronger dollar and rising expectations of Federal Reserve rate hikes weighed on prices.
1. Gold hits one-week low
Spot gold was down 1.4% at $3,931.54 per ounce by 0912 GMT on Thursday, after touching its lowest level since November 4. U.S. gold futures for December delivery fell 1.6% to $3,936.80 per ounce.
2. Rate hike bets increase
Markets saw an 89% chance of a 25-basis-point rate hike in December, while the probability of a 50-basis-point increase rose to 11% from zero before the October inflation data. Higher interest rates can diminish gold’s appeal because bullion pays no interest, while a stronger dollar makes it more expensive for buyers using other currencies.
3. Investors await producer prices
Investors were waiting for U.S. producer inflation data due Friday for further signals on the interest-rate outlook. Spot silver fell 1.3% to $50.99 per ounce, while palladium dropped 0.2% to $1,025.81.
