Gold Prices Decline as Dollar Strengthens, Rate-Hike Expectations Rise
(MENAFN) Gold prices continued trading below the $4,000-per-ounce threshold on Thursday, reaching their lowest level in more than a week as a stronger US dollar and rising expectations of Federal Reserve interest rate increases pressured the precious metal.
The decline extended gold's losses for a third consecutive trading session, following higher-than-anticipated US inflation data and hawkish comments from central bank officials that strengthened expectations of tighter monetary policy.
At 0524 GMT, spot gold had dropped 0.43% to $3,970.59 per ounce, marking its third successive session of losses. Silver also declined, falling 0.69% to $51.305 per ounce.
Meanwhile, the US dollar index remained just below 103, trading close to its highest level since April 2025.
US consumer prices increased by 0.4% in October compared with the previous month, exceeding economists' expectations of 0.3%. However, the pace of inflation slowed from September's 0.6% increase.
Federal Reserve Governor Christopher Waller indicated that he supported raising interest rates in December and suggested that a larger adjustment could be considered if inflation accelerated beyond his expectations.
Waller signaled that he favored a 25-basis-point increase even if monthly inflation showed improvement, while a considerably stronger reading could justify examining a 50-basis-point hike.
Investors are now monitoring upcoming US economic indicators, including producer price data, weekly initial jobless claims and existing home sales, for further indications of the Federal Reserve's monetary policy direction.
Rising interest rates generally put pressure on gold because they increase the opportunity cost of holding the metal, which does not generate interest income.
Separately, the US Bureau of Labor Statistics did not release annual headline or core inflation figures for October after the 2025 government shutdown disrupted the collection of survey data.
As a result, the agency lacked the corresponding figures from the previous year required to calculate annual inflation comparisons.
The decline extended gold's losses for a third consecutive trading session, following higher-than-anticipated US inflation data and hawkish comments from central bank officials that strengthened expectations of tighter monetary policy.
At 0524 GMT, spot gold had dropped 0.43% to $3,970.59 per ounce, marking its third successive session of losses. Silver also declined, falling 0.69% to $51.305 per ounce.
Meanwhile, the US dollar index remained just below 103, trading close to its highest level since April 2025.
US consumer prices increased by 0.4% in October compared with the previous month, exceeding economists' expectations of 0.3%. However, the pace of inflation slowed from September's 0.6% increase.
Federal Reserve Governor Christopher Waller indicated that he supported raising interest rates in December and suggested that a larger adjustment could be considered if inflation accelerated beyond his expectations.
Waller signaled that he favored a 25-basis-point increase even if monthly inflation showed improvement, while a considerably stronger reading could justify examining a 50-basis-point hike.
Investors are now monitoring upcoming US economic indicators, including producer price data, weekly initial jobless claims and existing home sales, for further indications of the Federal Reserve's monetary policy direction.
Rising interest rates generally put pressure on gold because they increase the opportunity cost of holding the metal, which does not generate interest income.
Separately, the US Bureau of Labor Statistics did not release annual headline or core inflation figures for October after the 2025 government shutdown disrupted the collection of survey data.
As a result, the agency lacked the corresponding figures from the previous year required to calculate annual inflation comparisons.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept any
responsibility or liability for the accuracy, content, images, videos,
licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright issues
related to this article, kindly contact the provider above.
Comments
No comment