Gold's biggest enemy is here! Gold prices fall for two consecutive days
Spot gold fell 1.1% to US$3,986.79 per ounce, with the market betting that the chance of the Federal Reserve raising interest rates by 50 basis points in December rose to 12.9%
Quick Look
- The U.S. consumer price index in October was higher than expected, and Federal Reserve officials issued hawkish remarks, which pushed up the dollar and raised the possibility of a sharp interest rate hike next month.
- Spot gold fell 1.1% to $3,986.79 per ounce on Wednesday, continuing the previous day's decline.
AI-generated summary
Why It Matters
U.S. consumer prices rose 0.4% in October from the previous month, higher than market expectations of 0.3%. Fed Governor Waller has said that if the core inflation rate reaches 0.3% in October, it will consider raising interest rates by 50 basis points at the December meeting.
Gold prices fell on Wednesday (11th). (Bloomberg)
[Financial Channel/Comprehensive Report] The price of gold fell on Wednesday (11th) due to higher-than-expected U.S. inflation data and hawkish remarks from Federal Reserve officials, which pushed up the U.S. dollar and raised the possibility of a sharp interest rate hike next month, causing gold prices to extend the previous day's decline.
Spot gold fell 1.1% to US$3,986.79 per ounce, although it rebounded to US$4,066.77 per ounce earlier in the session, continuing the previous day's decline.
U.S. gold futures for December delivery fell 0.7% to close at $4,000.50 an ounce.
Bob Haberkorn, senior market strategist at StoneX, said: "The Consumer Price Index (CPI) released results slightly higher than expected. The market interprets this as indicating that it is necessary for the Federal Reserve to adopt higher interest rates at the December meeting."
U.S. data showed that consumer prices rose 0.4% in October from the previous month, higher than market expectations. As a result, gold prices fell by about 3% on Tuesday (10th). Economists polled by Reuters had forecast consumer prices rising 0.3% in October. Before the data was released, Federal Reserve Governor Christopher Waller said that if the core inflation rate reaches 0.3% in October, he will consider raising interest rates by 50 basis points (2 yards) at the December meeting.
Although the market originally expected that the probability of the Fed raising interest rates by 25 basis points in December was 87%, before the CPI data was released, the market's bets on a 50 basis point interest rate hike were originally zero. After the data was released, the market's bets rose to 12.9%, which also pushed the U.S. dollar index to its highest level since April 2025.
A stronger dollar will make gold more expensive for overseas buyers; on the other hand, gold itself does not generate interest income, making it less attractive in a high interest rate environment.
Spot palladium rose 1.8% to $1,043 an ounce after hitting its highest level since October 22.
Spot silver rose 0.7% to $51.88 an ounce.
What to Watch
AI outlook — possibilities, not facts
Fed may raise interest rates by 50 basis points at December meeting
Possible · Within weeks
Open Questions
- Will the Fed finally raise interest rates by 50 basis points at its December meeting?
- Will gold prices continue to fall in the short term?
