Gold prices continued to decline for the fourth consecutive session during trading on Wednesday, November 13, affected by the strength of the dollar and the rise in US bond yields after the annual inflation rate in the United States rose in October as expected.
The U.S. Labor Department also reported that progress toward low inflation has slowed since mid-year, which could lead to fewer interest rate cuts from the Federal Reserve next year.
Spot gold fell 0.7% to $2,580.39 an ounce by 01:49 p.m. ET (1849 GMT), after hitting a near two-month low earlier in the session.
US gold futures fell 0.8% to settle at $2,586.50, according to Reuters.
The dollar rose to a near seven-month high against major currencies, while the benchmark 10-year U.S. Treasury yield rose.
“The CPI rose but came in line with expectations, which had a mixed impact on gold prices,” said Zain Vawda, market analyst at MarketPulse by OANDA. “Markets have increased their bets on a possible 25bp rate cut in December.”
Traders are pricing in an 82% chance of a Fed rate cut in December, up from about 58% before the inflation data, according to the CME FedWatch tool.
However, investors believe that a Trump presidency could prompt the Federal Reserve to pause its monetary easing cycle if inflation rises after the tariffs he is expected to impose after taking office.
In the short term, there is a possibility that gold prices will recover slightly to around $2,650 per ounce, but it may decline again after that, Fauda said.
US producer price index and weekly jobless claims are due on Thursday, with retail sales data due on Friday. Markets are also awaiting comments from Federal Reserve Chairman Jerome Powell and other bank officials.
“The next upside target for gold is a close above the strong resistance level at $2,700. The next downside target for gold in the near term is to push futures prices below the strong technical support level at $2,500,” Jim Wyckoff, senior market analyst at Kitco Metals, said in a note.
As for other metals prices, the spot price of silver decreased by 0.5% to $ 30.55 per ounce. Platinum fell by 0.9% to $ 938.60 per ounce, and palladium fell by 1.3% to $ 932.10.
