Gold slips as strong US inflation data bolsters dollar, Fed hike expectations
GLD•Spot gold fell 0.2% to $3,979.09 per ounce as stronger-than-expected US inflation and hawkish Federal Reserve commentary lifted the dollar and bolstered expectations of a December rate increase. Traders priced in a 100% probability of a hike, according to CME’s FedWatch tool.
1. Inflation pressures gold
Spot gold was down 0.2% at $3,979.09 per ounce by 0022 GMT, while US gold futures for December delivery fell 0.4% to $3,984.50. The dollar held near a one-month high after October US inflation accelerated more than expected and policymakers signalled a willingness to tighten policy more aggressively.
2. Rate hike expectations
Traders priced in a 100% probability of a December rate increase, according to CME’s FedWatch tool. Higher interest rates increase the opportunity cost of holding non-yielding bullion, reducing its appeal to investors. Spot silver fell 0.6% to $51.40 per ounce, while palladium dipped 0.3% to $1,024.48.
