Gold slides as higher US inflation reinforces Fed tightening bets
GLD•Spot gold fell 1.1% to $4,024.10 an ounce after September PCE inflation rose 0.5%, and traders priced in an 83% chance of a December Federal Reserve rate hike. Bullion was on track for a second straight monthly decline.
1. Inflation weighs on gold
Spot gold was down 1.1% at $4,024.10 per ounce in mid-session trading, while December US gold futures fell 0.4% to $4,036.40. September PCE inflation climbed 0.5%, after a 0.3% rise in August, as consumers paid more for gasoline and other goods.
2. Rate expectations rise
Traders priced in about an 83% chance of a US rate hike in December after the Federal Reserve held rates unchanged on Wednesday. Higher interest rates increase the opportunity cost of holding non-yielding gold. Gold was on track for its second consecutive monthly decline.
3. Other metals fall
Silver fell 2.7% to $52.51 an ounce, platinum dropped 3.5% to $1,479.20 and palladium slid 0.7% to $1,004.11; all three were also headed for a second straight monthly decline.
