Gold prices fall about 4.5% in a week, their biggest weekly drop since early June

International gold prices edged up on November 13, but the gain did not reverse their decline for the week. Spot gold closed at $3,879.71 an ounce, up 0.1%; December gold futures closed at $3,886.30 an ounce, nearly unchanged. Gold prices fell about 4.5% for the week, their biggest weekly drop since early June.

After the U.S. Producer Price Index was released, spot gold briefly rose to $3,922.97 an ounce. The data showed that the U.S. Producer Price Index for final demand rose 0.3% month on month in October, below the 0.4% forecast in an earlier Reuters survey; September’s increase was revised upward to 1.4%. The release eased market expectations of a larger Federal Reserve rate increase.

Gold prices had fallen 3% on November 12, reaching their lowest level in more than a year. Rising oil prices raised concerns that inflation and interest rates would remain high; a higher than expected U.S. Consumer Price Index reading released earlier in the week added to gold’s losses. Independent analyst Tai Wong said continued pressure on the bond market from the Federal Reserve’s hawkish stance made it difficult for gold to sustain its initial gains after the producer price data was released.

The CME FedWatch tool showed that markets put the probability of a 0.25 percentage point Federal Reserve rate increase in December at 91.4%, and the probability of a 0.5 percentage point increase at 8.6%. Among other precious metals, spot silver and platinum each fell 1.9%, while palladium rose 1.1%; all three recorded losses for the week.

Source: VietVance