Gold Falls More Than $100 an Ounce as US Inflation Exceeds Forecasts

On November 10, spot gold closed at $4,033.5 an ounce in New York, down $107.4, or 2.6%, from the previous trading session. Spot silver fell 3.5% to $51.67 an ounce; gold futures for December delivery closed at $4,030.2 an ounce, down 2%.

International gold prices over the past year, in US dollars per ounce.（VietVance）

Data from the US Department of Labor showed that the consumer price index rose 0.4% in October from the previous month, below September’s 0.6% increase but above the 0.3% forecast by economists surveyed by Reuters. According to CME’s FedWatch tool, traders’ estimated probability of a Federal Reserve rate increase in December rose to 100% from 84% in the previous session. The estimated probability of a 0.25 percentage point increase was 90%, while that of a 0.5 percentage point increase was 10%. These figures reflect market expectations, not a decision already made by the Fed.

Following the shift in rate expectations, the dollar index rose 0.55% to close at 102.22. The yield on the 10-year US Treasury note touched 5% during the session and closed at 4.992%, up 13 basis points. A stronger dollar and higher bond yields both put pressure on gold, which is priced in dollars and pays no interest.

At 7:15 a.m. Vietnam time on November 11, spot gold traded at $4,041 an ounce in Asian markets, up more than 0.2% from the US market close. Converted at Vietcombank’s dollar selling rate, that was about 125.6 million Vietnamese dong per tael, down 2.5 million dong from the previous morning. At the same time, the bank quoted dollar buying and selling rates of 25,380 and 25,790 dong, respectively, both up 90 dong from the previous morning.

Source: VietVance