Gold Steadies After CPI And Fed Sell-Off, Central-Bank Demand Provides Support

(MENAFN- MENAFNEditorial) Gold stabilized to some extent on Wednesday after Tuesday's losses. The metal continues to find support from ongoing central bank demand. The latter collectively bought 321 tonnes in the third quarter, extending a strong buying trend from the official sector. The solid demand could help limit any sell-offs in gold.

The rate shock still caps gold's rebound. US consumer prices rose 0.4% in October against a 0.3% forecast, and a core beat sustained inflation concerns and tightening expectations. Fed funds futures now fully price in a December hike and two further increases by mid-2027. Higher US yields and a firm dollar raise the cost of holding a metal that pays no interest. Fed Governor Christopher Waller's openness to a half-point move keeps that pressure live. Thin trading, with US bond markets shut for Veterans Day, fuels some volatility risk.
Friday's US producer price data is the next test, ahead of retail sales on 17 November and the Fed's December decision. A second hot inflation print would lift the odds of a half-point hike and push gold lower, while a softer reading would let the recovery extend. With a full hiking cycle already priced in, the metal could remain exposed to volatility on unexpected changes in sentiment.

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