Gold slips as higher oil, US inflation data bolster Fed hike bets
GLD•Spot gold fell 0.5% to $4,000.54 an ounce as higher oil prices and accelerating US inflation strengthened expectations of a December Federal Reserve rate hike. Traders priced in a 75% chance of a hike, while gold was on track for a second straight monthly decline.
1. Gold under pressure
Spot gold was down 0.5% at $4,000.54 per ounce by 0511 GMT, and US gold futures fell 0.5% to $4,010.10. Bullion was on track for a second consecutive monthly decline. Tim Waterer of KCM Trade said gold’s decline was testing support around $4,000 and that it remained to be seen whether value buying would limit losses.
2. Rate and oil outlook
US inflation accelerated in September as consumers paid more for gasoline and other goods, supporting expectations of a December interest rate increase. Traders priced in about a 75% chance of a hike. Higher interest rates increase the opportunity cost of holding non-yielding bullion. Oil prices rose and were set for a fourth monthly gain.
3. Other precious metals fall
Spot silver fell 1.6% to $51.53 per ounce, platinum dropped 1.9% to $1,459.75 and palladium fell 1.4% to $992.37. All three metals were headed for weekly and monthly declines.
