Gold extends fall as dollar, Treasury yields rise

Gold prices extended losses for the fourth straight session on Wednesday, weighed down by a stronger dollar and elevated bond yields on news that October US consumer prices increased as expected.

The Labor Department also reported slower progress toward low inflation since mid-year, which could result in fewer interest rate cuts from the Federal Reserve next year.

Spot gold was down 0.7% at USD 2,580.39 per ounce by 01:49 p.m. ET (1849 GMT), after hitting a near two-month low earlier in the session.

US gold futures settled 0.8% lower at USD 2,586.50 per ounce.

The dollar advanced near a seven-month high against major currencies, while benchmark US 10-year yield climbed.

“The CPI increased but met expectations, leading to a mixed impact on gold prices. Markets have increased their bets on a potential 25 basis points interest rate cut in December,” Zain Vawda, market analyst at MarketPulse by OANDA, said.

Traders are pricing in an 82% chance of a Fed rate cut in December, up from around 58% before the data, according to CME FedWatch tool.

However, investors believe Trump’s presidency might cause the Fed to pause its easing cycle if inflation takes off after expected new tariffs.

“In the short term, there is potential for gold prices to slightly recover to around USD 2,650 per ounce, but they may decline again afterward,” Vawda added.

Looking ahead, the US Producer Price Index (PPI) and weekly jobless claims are due on Thursday, with retail sales data on Friday. Remarks from Fed Chair Jerome Powell and other central bank officials are also on the radar.

“Gold bulls’ next upside price objective is to produce a close above solid resistance at USD 2,700. Bears’ next near-term downside price objective is pushing futures prices below solid technical support USD 2,500,” Jim Wyckoff, a senior market analyst at Kitco Metals, said in a note.

Spot silver fell 0.5% to USD 30.55 per ounce. Platinum slipped 0.9% to USD 938.60 per ounce, while palladium dropped 1.3% to USD 932.10 per ounce.

(Reporting by Sherin Elizabeth Varghese, Brijesh Patel and Anjana Anil in Bengaluru; Editing by Shreya Biswas, Richard Chang and Mohammed Safi Shamsi)