Gold slides as higher US inflation reinforces Fed tightening bets
GLD•Gold fell 1% to $4,026.12 an ounce after September US inflation accelerated, reinforcing expectations of a Federal Reserve rate hike in December. Traders priced in an 83% chance of a hike, while silver, platinum and palladium also declined.
1. Inflation weighs on gold
Spot gold fell 1% to $4,026.12 per ounce by 9:13 a.m. EDT, and December US gold futures dropped 0.3% to $4,037.60. Gold was on track for its second straight monthly decline. The Personal Consumption Expenditures Price Index rose 0.5% in September, after an unrevised 0.3% increase in August.
2. Rate expectations and metals
Traders priced in about an 83% chance of a US rate hike in December. Higher interest rates increase the opportunity cost of holding non-yielding gold, metals trader David Meger said. Silver fell 2.7%, platinum dropped 3.7% and palladium slid 0.7%; all three were also headed for a second straight monthly decline.
