Gold slides as higher US inflation reinforces Fed tightening bets
GLD•Spot gold fell 1.4% to $4,008.76 an ounce after September US inflation accelerated, reinforcing expectations of a December Federal Reserve rate hike. Traders priced in an 80% chance of a hike, while bullion was on track for a second consecutive monthly decline.
1. Inflation weighs on gold
Gold fell more than 1% on Thursday after US inflation data reinforced expectations of a Federal Reserve rate hike later this year, reducing the appeal of the non-yielding metal. Spot gold was down 1.4% at $4,008.76 an ounce, while US gold futures settled 0.5% lower at $4,031.40. Bullion was on track for its second straight monthly decline.
2. Rate expectations rise
The Personal Consumption Expenditures Price Index rose 0.5% in September, after an unrevised 0.3% increase in August, as consumers paid more for gasoline and other goods. The Fed kept rates unchanged on Wednesday, and traders priced in about an 80% chance of a US rate hike in December.
3. Other metals fall
Silver fell 3.5% to $52.08 an ounce, platinum dropped 3.7% to $1,481.75 and palladium slid 0.9% to $1,001.92. All three metals were also headed for a second consecutive monthly decline.
