Gold rebounds after sharp selloff though Fed hike bets weigh
GLD•Spot gold rose 0.6% to $4,057.33 an ounce after falling nearly 3% on Tuesday. Stronger-than-expected U.S. inflation and expectations of a December Federal Reserve rate increase limited gains.
1. Gold prices recover
Spot gold rose 0.6% to $4,057.33 per ounce at 0637 GMT on Wednesday, following a nearly 3% decline to $4,017.21 in the previous session. U.S. gold futures for December delivery gained 0.9% to $4,065.40.
2. Rate expectations weigh
U.S. inflation accelerated more than expected in October, and traders priced in a 100% probability of a December rate increase, up from 84% before the data. Higher interest rates raise the opportunity cost of holding bullion, which pays no yield.
3. Other metals rise
An analyst described the rebound as a technical retracement after Tuesday’s losses, while another said the near-term macro setup for gold did not seem positive. Spot silver climbed 2.9% to $53.01 per ounce, and palladium gained 2.5% to $1,050.05.
