Gold falls nearly 3% as CPI tops forecasts, lifting dollar and yields
GLD•GLD•GLD•GLD•Spot gold fell 2.8% to $4,021.36 an ounce after October US CPI rose 0.4%, above economists’ 0.3% forecast. Markets fully priced in a 25-basis-point Fed rate hike in December, while the chance of a 50-basis-point hike rose to 10.5%.
Spot gold fell 2.8% to $4,021.36 per ounce by 11:33 a.m. ET, while US gold futures fell 1.9% to $4,036.00. The US Consumer Price Index rose 0.4% in October, after rising 0.6% in September; economists had forecast a 0.3% increase.
The dollar and Treasury yields rose after the inflation data, reinforcing expectations of tighter Federal Reserve policy. Markets fully priced in a 25-basis-point rate hike in December, while the probability of a 50-basis-point hike increased to 10.5% from zero before the data. Fed governor Christopher Waller said he would support more aggressive action if inflation proved too hot.
An analyst said the higher-than-expected inflation reading was a short-term negative for gold. Spot silver fell 3.9% to $51.32 per ounce and palladium declined 2.0% to $1,021.22.
