Gold Rebounds Slightly After Falling Nearly 3% on Higher-Than-Expected US Inflation
Gold fell nearly 3% in the previous trading session as higher-than-expected US inflation lifted the dollar and US Treasury yields. At 7 a.m. Vietnam time on November 11, spot gold and December gold futures both recovered slightly. Markets also raised their bets on a 0.5-percentage-point Federal Reserve rate increase in December.
International gold prices fell nearly 3% in the previous trading session after US inflation data came in higher than expected. At the close, spot gold was down 2.7% at $4,028.39 per ounce, while December gold futures fell 2% to $4,030.20 per ounce. At 7 a.m. Vietnam time on November 11, spot gold recovered 0.17% to $4,038.6 per ounce, and December gold futures rose 0.36% to $4,044.7 per ounce.
The US Bureau of Labor Statistics reported that the consumer price index rose 0.4% month on month in October, following a 0.6% increase in September. Economists surveyed by Reuters had forecast a 0.3% monthly increase in October. Marex analyst Edward Meir said the slightly higher-than-expected inflation figures put some pressure on gold prices in the short term.
After the inflation data was released, markets increased their bets on a 0.5-percentage-point Federal Reserve rate increase in December. Federal Reserve official Christopher Waller said he would support stronger action if the consumer price index showed inflation running too hot. CME’s FedWatch tool showed that the market-implied probability of a 0.5-percentage-point increase in December rose to 10% from 0% before the data was released.
Meanwhile, the dollar strengthened against a basket of major currencies, and US Treasury yields rose. A stronger dollar made gold more expensive for buyers using other currencies, while higher bond yields increased the opportunity cost of holding gold. Standard Chartered said gold remained above the key $4,000-per-ounce level, with markets focused on the Federal Reserve’s interest rate decision at its December meeting.
The Monetary Authority of Singapore said it would offer gold bar storage services to foreign central banks and reduce taxes for some gold businesses to improve the competitiveness of its precious metals trading sector. Other precious metals also fell: spot silver dropped 3.95% to $51.30 per ounce, palladium declined 1.2% to $1,028.83 per ounce, and platinum fell 2.7% to $1,534.38 per ounce.
Source: VietVance
