Gold falls as hot inflation figures and higher dollar weigh
GLD•Gold fell nearly 3% on Tuesday and extended its decline on Wednesday after US consumer prices rose 0.4% in October, above economists’ 0.3% forecast. A stronger dollar and bets on higher December interest rates weighed on bullion.
1. Gold extends losses
Spot gold fell 0.8% to $3,999.42 per ounce by 11:39 a.m. ET on Wednesday, after dropping almost 3% on Tuesday. US gold futures for December delivery fell 0.6% to $4,006.50 per ounce.
2. Inflation lifts rate bets
US consumer prices rose 0.4% in October, compared with economists’ 0.3% forecast. Markets priced in an 87% chance of a 25-basis-point rate hike in December, while bets on a 50-basis-point increase rose to 12.9% from zero before the inflation data. The dollar reached a four-week high.
3. Other metals rise
A stronger dollar makes bullion more expensive for overseas buyers, while higher interest rates make non-yielding gold less attractive. Palladium rose 3.3% to $1,058.24 per ounce after touching its highest level since October 22, and silver gained 1.3% to $52.19.
