Gold Slumps on Hotter Inflation and Hawkish Fed Comments
Gold prices fell sharply to below $4,060 an ounce on Tuesday, pressured by stronger-than-expected US inflation data and hawkish remarks from Federal Reserve Governor Christopher Waller, which put a potential 50-basis-point rate hike in December into focus. US headline inflation eased to 0.4% month-on-month in October 2026, from 0.6% in September, but exceeded market expectations of 0.3%. Meanwhile, core inflation held steady at 0.3% for a third consecutive month, above forecasts of 0.2%, pointing to persistent underlying price pressures. Waller said he supports further tightening in December and would favor a half-percentage-point increase if inflation continues to accelerate. Money markets are pricing in around 28 basis points of tightening, suggesting a 25-basis-point hike is fully priced in, with some expectations of a larger increase. Rising rate expectations have weighed on gold by increasing the opportunity cost of holding the non-yielding metal.
Gold prices fell sharply to below $4,060 an ounce on Tuesday, pressured by stronger-than-expected US inflation data and hawkish remarks from Federal Reserve Governor Christopher Waller, which put a potential 50-basis-point rate hike in December into focus. US headline inflation eased to 0.4% month-on-month in October 2026, from 0.6% in September, but exceeded market expectations of 0.3%. Meanwhile, core inflation held steady at 0.3% for a third consecutive month, above forecasts of 0.2%, pointing to persistent underlying price pressures.
Waller said he supports further tightening in December and would favor a half-percentage-point increase if inflation continues to accelerate. Money markets are pricing in around 28 basis points of tightening, suggesting a 25-basis-point hike is fully priced in, with some expectations of a larger increase. Rising rate expectations have weighed on gold by increasing the opportunity cost of holding the non-yielding metal.