Gold slips below $4,000 as strong US inflation data strengthens bets on a December Fed rate hike
Spot gold fell 0.6 per cent to $3,997.39 an ounce on Friday as a stronger-than-expected US inflation reading and climbing oil prices strengthened expectations of another Federal Reserve rate hike in December.
Gold prices slipped on Friday as higher oil prices and robust US inflation data strengthened the case for another Federal Reserve interest rate hike later this year, pushing bullion below the $4,000 mark.
Spot gold was down 0.6 per cent at $3,997.39 per ounce by 0255 GMT, while US gold futures for December delivery dropped 0.6 per cent to $4,007.80, Reuters reported. On India's MCX, gold futures fell 0.59 per cent, and December COMEX futures declined 0.73 per cent to about $4,002 an ounce. Bullion is on track for a second consecutive monthly decline. Elsewhere in precious metals, spot silver slid 2.1 per cent to $51.27 an ounce, platinum dropped 1.9 per cent to $1,458.85 and palladium fell 2 per cent to $986.08, with all three headed for weekly and monthly losses.
The move followed US data showing the Personal Consumption Expenditures price index - the Federal Reserve's preferred inflation gauge - rose 0.5 per cent month-on-month in September, taking the annual rate to 3.6 per cent, according to the Bureau of Economic Analysis. Traders are now pricing in roughly a 75 per cent probability of a 25-basis-point rate hike in December, according to the CME FedWatch Tool.
Oil added to the inflation pressure. Crude prices climbed on Friday and were on track for a fourth consecutive monthly gain - the steepest run since July - on supply concerns after Yemen's Houthi movement stepped up attacks on Saudi Arabia, keeping energy costs elevated and complicating the Fed's path.
Analysts say gold's near-term direction now hinges on whether incoming data confirms the inflation trend. A softer reading could revive demand for bullion, while another firm report would reinforce expectations of tighter policy and keep pressure on non-yielding assets.
This post is market news information only, not financial advice.
