Gold gains after steep drop, but hawkish central bank signals weigh
GLD•GLD•GLD•GLD•Gold rose 0.3% to $4,042.71 an ounce on Wednesday after falling nearly 3% the previous day. US October inflation rose 0.4%, and traders priced in a 100% chance of a Federal Reserve rate hike in December.
Spot gold rose 0.3% to $4,042.71 per ounce by 1243 GMT, after dropping around 3% to $4,013.29 on Tuesday. US gold futures for December delivery gained 0.51% to $4,050.70 per ounce.
US consumer prices increased 0.4% in October, above economists’ 0.3% forecast. Traders raised the odds of a December Federal Reserve rate hike to 100%, while expectations of a half-percentage-point increase also rose. Several policymakers signalled that further rate increases could be needed; higher rates can weigh on gold because bullion pays no interest.
Spot palladium gained 5.2% to $1,078.56 per ounce, reaching its highest level since October 22. An analyst attributed the rebound mainly to short covering and position adjustments. Spot silver climbed 2.5% to $52.8116 per ounce.
