Gold fell "so much" this week! The chance of the Federal Reserve raising interest rates in December soars to 90%, and experts predict a bad trend

Gold prices were roughly stable on Friday (16th), but still ended the week lower. (Bloomberg)

[Financial Channel/Comprehensive Report] As a series of U.S. inflation data were higher than expected and traders assessed the possibility of further interest rate hikes by the Federal Reserve this year, gold prices were generally stable on Friday (16th), but still ended the week lower.

Spot gold fell 0.1% to $4,165.12 an ounce, and is down 0.7% so far this week.

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U.S. gold futures for December delivery rose 0.3% to settle at $4,181.10 an ounce.

Bart Melek, global head of commodity strategy at TD Securities, said: "Gold prices are currently fluctuating within a certain range, and the trend is moving toward the lower edge of the support range. The main reason is that we still have a lot of uncertainty about what actions the Federal Reserve will take next."

Data released on Thursday showed that U.S. producer prices rose the most in four and a half years last month. The data comes a day after a consumer price report released on Wednesday also showed that prices accelerated in September.

Chicago Fed President Austan Goolsbee said the data were "disappointing," while Cleveland Fed President Beth Hammack said the Fed may need to raise interest rates more aggressively if public expectations for inflation worsen significantly.

According to CME Group's FedWatch, traders generally expect the Federal Reserve to keep interest rates unchanged this month, but now have priced in a 90% chance of raising interest rates in December.

Gold is often seen as a hedge against inflation, but higher interest rates tend to reduce the appeal of bullion, which does not generate interest income.

Hamad Hussain, climate and commodities economist at Capital Economics, said: "Gold prices are likely to gradually drift lower for the rest of the year as the Fed continues to raise interest rates and concerns that the artificial intelligence (AI) boom is coming to an end turn out to be temporary."

In terms of other precious metals, spot silver fell 0.7% to US$57.05 per ounce; platinum was unchanged at US$1,626.15 per ounce; and palladium fell 1.1% to US$1,113.61 per ounce. All three metals ended the week lower.

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