Gold slips as higher oil, US inflation data bolster Fed hike bets
GLD•Gold fell 0.9% to $3,982.85 an ounce on Friday as higher oil prices and accelerating US inflation strengthened expectations for a December Federal Reserve rate hike. Traders priced in a 72% chance of a hike, while gold was headed for a second consecutive monthly decline.
1. Gold faces rate pressure
Spot gold fell 0.9% to $3,982.85 per ounce by 0740 GMT, and US gold futures dropped 1% to $3,992.50. Bullion was headed for a weekly decline and a second straight monthly loss, with prices testing support around $4,000, KCM Trade chief market analyst Tim Waterer said.
2. Hike expectations rise
US inflation accelerated in September as consumers paid more for gasoline and other goods. Traders were pricing in about a 72% chance of a Federal Reserve rate increase in December. Higher interest rates raise the opportunity cost of holding non-yielding bullion.
3. Other metals fall
Oil prices rose and were set for a fourth monthly gain. Silver fell 3.1% to $50.74, platinum dropped 3.3% to $1,439.05 and palladium declined 2.3% to $982.50; all three were headed for weekly and monthly declines.
