Gold Erases Gains on Strong Dollar
Gold erased its early gains to fall towards $4,030 an ounce on Wednesday, as the US dollar climbed to its highest level since April 2025, supported by hotter-than-expected inflation data and hawkish Federal Reserve comments. A modest rebound in oil prices following their recent decline to 10-week lows also added to inflationary concerns. US consumer prices rose 0.4% in October, above expectations of 0.3%, prompting traders to raise the probability of a December Fed rate hike to 100%, from 84% before the release, according to the CME FedWatch Tool. Expectations of a larger, 50-basis-point increase also gained traction. Meanwhile, Fed Governor Christopher Waller suggested that persistent core inflation could warrant a half-point hike as early as December, while other policymakers, including Anna Paulson and Michelle Bowman, maintained a hawkish tone, reinforcing expectations of further monetary tightening and adding pressure on non-yielding gold.
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Gold erased its early gains to fall towards $4,030 an ounce on Wednesday, as the US dollar climbed to its highest level since April 2025, supported by hotter-than-expected inflation data and hawkish Federal Reserve comments. A modest rebound in oil prices following their recent decline to 10-week lows also added to inflationary concerns. US consumer prices rose 0.4% in October, above expectations of 0.3%, prompting traders to raise the probability of a December Fed rate hike to 100%, from 84% before the release, according to the CME FedWatch Tool. Expectations of a larger, 50-basis-point increase also gained traction.
Meanwhile, Fed Governor Christopher Waller suggested that persistent core inflation could warrant a half-point hike as early as December, while other policymakers, including Anna Paulson and Michelle Bowman, maintained a hawkish tone, reinforcing expectations of further monetary tightening and adding pressure on non-yielding gold.