Gold prices edged lower on Thursday as stronger-than-expected US inflation data and hawkish comments from Federal Reserve officials pushed the dollar close to a one-month high and reinforced expectations of an interest rate hike next month, weighing on the precious metal.
By 00:22 GMT, spot gold had fallen 0.2% to $3,979.09 an ounce, while US gold futures for December delivery declined 0.4% to $3,984.50.
The dollar remained near its highest level in a month against major currencies at the start of Asian trading, making dollar-priced gold more expensive for holders of other currencies.
Expectations of a half-percentage-point increase in US interest rates next month strengthened after data showed that inflation in the United States accelerated more than expected in October, while policymakers signalled their readiness to tighten monetary policy.
According to CME Group’s FedWatch tool, traders are pricing in a 100% probability of an interest rate increase in December.
Although gold is traditionally considered a hedge against inflation, higher interest rates increase the opportunity cost of holding the non-yielding metal, reducing its appeal to investors.
Among other precious metals, spot silver fell 0.6% to $51.40 an ounce, while palladium declined 0.3% to $1,024.48.
Source: Reuters
