Gold falls as hot inflation figures, higher dollar weigh
GLD•Spot gold fell 1.1% to $3,986.79 an ounce after a nearly 3% drop on Tuesday, as hotter-than-expected US inflation and hawkish Fed comments lifted the dollar. US consumer prices rose 0.4% in October, versus economists’ 0.3% forecast.
1. Inflation pressures gold
Spot gold was down 1.1% at $3,986.79 per ounce by 1:51 p.m. ET on Wednesday, after recovering to $4,066.77 earlier in the session. US gold futures settled 0.7% lower at $4,000.50 per ounce.
2. Rate hike bets rise
US consumer prices increased 0.4% in October, above the 0.3% forecast. Fed Governor Christopher Waller said a 0.3% core inflation reading would prompt him to consider a half-point hike in December; after the CPI data, markets priced in an 87% chance of a 25-basis-point hike and a 12.9% chance of a 50-basis-point increase.
3. Other metals mixed
A stronger dollar makes bullion more expensive for overseas buyers, while higher interest rates reduce the appeal of non-yielding gold. Palladium rose 1.8% to $1,043 an ounce after touching its highest level since October 22, and silver gained 0.7% to $51.88.
