Gold prices declined on Thursday, influenced by stronger-than-anticipated US inflation figures and assertive remarks from the Federal Reserve, which propelled the dollar to approach a one-month peak and bolstered expectations for an interest-rate hike in the upcoming month, thereby exerting pressure on bullion. Spot gold decreased by 0.2% to $3,979.09 per ounce as of 0022, while US gold futures for December delivery fell by 0.4% to $3,984.50. The dollar maintained its position close to a one-month peak against major currencies during early Asian trading, resulting in higher costs for bullion priced in dollars for holders of alternative currencies.
The odds of a half-percentage-point Fed rate hike next month surged after data showed US inflation accelerated more than expected in October and policymakers signalled a willingness to tighten policy more aggressively. Traders are assigning a 100% probability to a rate increase in December, as indicated by CME’s FedWatch tool. Gold is often regarded as a safeguard against inflation; however, elevated interest rates heighten the opportunity cost associated with holding non-yielding bullion, thereby diminishing its attractiveness to investors.
Iran will not permit any particle of enriched nuclear material to exit the country, and there will be repercussions should there be any further US strikes on the Islamic Republic, stated Iranian security chief Mohsen Rezaei in televised comments. Elsewhere, Bank of England policymaker Megan Greene stated on Wednesday that it was appropriate to “proactively tighten our monetary policy stance” to mitigate the risk of wage growth becoming entrenched at elevated levels and firms transferring those costs. Among other metals, spot silver decreased by 0.6% to $51.40 per ounce, while palladium experienced a decline of 0.3% to $1,024.48.
