Gold falls nearly 3% as CPI tops forecasts, lifting dollar and yields
GLD•Gold fell nearly 3% after US consumer prices rose 0.4% in October, above economists’ 0.3% forecast, lifting the dollar and Treasury yields. Spot gold was down 2.7% at $4,028.39 an ounce.
1. Gold declines on inflation data
Spot gold fell 2.7% to $4,028.39 per ounce, while US gold futures settled 2.0% lower at $4,030.20. The US Consumer Price Index rose 0.4% in October, after a 0.6% increase in September; economists had forecast a 0.3% rise.
2. Rate hike bets increase
The inflation reading and comments from Federal Reserve governor Christopher Waller, who said he would support more aggressive action if inflation proved too hot, boosted expectations of a larger December rate hike. A 25-basis-point increase was fully priced in, while the probability of a 50-basis-point hike rose to 10% from 0% before the data. The dollar and Treasury yields climbed.
3. Other metals also fall
Silver fell 3.95% to $51.30 per ounce, palladium declined 1.2% to $1,028.83 and platinum dropped 2.7% to $1,534.38. The Monetary Authority of Singapore said it would launch a bullion vaulting service for foreign central banks and lower taxes on some companies in the gold market.
