Gold Sinks Below USD4,000 as Hot Inflation Fuels Fed Hike Bets
(MENAFN) Gold slipped to its weakest level in more than a week on Thursday, staying under the $4,000-an-ounce threshold as a firmer US dollar and mounting bets on Federal Reserve rate hikes sapped demand for the metal.
Spot gold fell 0.43% to $3,970.59 per ounce at 0524GMT, its third straight daily decline. Silver dropped 0.69% to $51.305 per ounce.
Hotter-than-forecast US inflation data and hawkish signals from central bank officials have strengthened the case for tighter monetary policy. US consumer prices climbed 0.4% in October from the prior month, topping the 0.3% economists expected, though the pace eased from September’s 0.6%.
The US dollar index hovered just under 103, close to its highest since April 2025.
Christopher Waller, a Federal Reserve governor, backed a rate increase in December and flagged the chance of a bigger move if inflation surprises to the upside. He said he was leaning toward a 25-basis-point hike even if monthly inflation cooled, but that a substantially stronger reading could justify weighing a 50-basis-point increase.
Traders now turn to upcoming US data, including producer prices, weekly jobless claims and existing home sales, for further clues on the Fed’s next steps.
Higher rates tend to pressure gold because they raise the opportunity cost of holding an asset that pays no interest.
Separately, the Bureau of Labor Statistics did not release annual headline or core inflation figures for October. The 2025 government shutdown disrupted data collection, leaving the agency without the year-earlier readings needed for year-over-year comparisons.
Spot gold fell 0.43% to $3,970.59 per ounce at 0524GMT, its third straight daily decline. Silver dropped 0.69% to $51.305 per ounce.
Hotter-than-forecast US inflation data and hawkish signals from central bank officials have strengthened the case for tighter monetary policy. US consumer prices climbed 0.4% in October from the prior month, topping the 0.3% economists expected, though the pace eased from September’s 0.6%.
The US dollar index hovered just under 103, close to its highest since April 2025.
Christopher Waller, a Federal Reserve governor, backed a rate increase in December and flagged the chance of a bigger move if inflation surprises to the upside. He said he was leaning toward a 25-basis-point hike even if monthly inflation cooled, but that a substantially stronger reading could justify weighing a 50-basis-point increase.
Traders now turn to upcoming US data, including producer prices, weekly jobless claims and existing home sales, for further clues on the Fed’s next steps.
Higher rates tend to pressure gold because they raise the opportunity cost of holding an asset that pays no interest.
Separately, the Bureau of Labor Statistics did not release annual headline or core inflation figures for October. The 2025 government shutdown disrupted data collection, leaving the agency without the year-earlier readings needed for year-over-year comparisons.
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