Gold fell sharply this week! The worst record since early June, analysts poured cold water on it

Gold prices fell about 4.5% this week, recording their worst weekly performance since early June. (Bloomberg)

[Financial Channel/Comprehensive Report] U.S. inflation data were generally in line with market expectations, easing some of the market’s bets on a sharp interest rate hike by the Federal Reserve, driving gold prices higher on Friday (13th). However, as gold prices suffered a sell-off on Thursday (12th) and fell to a new low in more than a year, gold still ended the week lower.

Spot gold rose 0.1% to $3,879.71 an ounce. After the release of the U.S. Producer Price Index (PPI) data, the price of gold once hit the day's high of $3,922.97 per ounce.

U.S. gold futures for December delivery ended roughly flat at $3,886.30 an ounce.

Data showed that the U.S. final demand producer price index (PPI) rose 0.3% last month, down from an upwardly revised 1.4% increase in September. "Reuters" original survey predicted that PPI would rise 0.4%.

Independent analyst Tai Wong said: "With the bond market continuing to be under pressure and facing the hawkish stance of the Federal Reserve, gold prices have struggled to hold on to the initial gains after the release of PPI data. PPI did not show a higher-than-expected increase like last month, but the core PPI increased by 0.3% month-on-month, which is still too high for policymakers."

Gold prices fell 3% on Thursday to their lowest level in more than a year as rising oil prices raised concerns about rising inflation and maintaining high interest rates. Higher-than-expected consumer price index (CPI) data released earlier this week also further exacerbated the decline in gold prices.

This caused gold prices to fall about 4.5% this week, recording its worst weekly performance since early June.

Tai Wong added: "This is a difficult week for gold. With the strong stance of the hawks in the Federal Reserve, it may be difficult for gold prices to regain $4,000 an ounce."

According to the FedWatch tool of CME Group, the market currently estimates that the probability of the Federal Reserve raising interest rates by 1 point (25 basis points) in December is 91.4%, which is lower than the 96.2% before the release of PPI data. However, the market currently estimates that the probability of a 2-point (50 basis point) interest rate hike is 8.6%, which is also lower than the 13.8% before the PPI announcement.

In terms of other precious metals, spot silver fell 1.9% to US$49.05 per ounce; spot platinum fell 1.9% to US$1,490.06 per ounce; spot palladium rose 1.1% to US$1,004.40 per ounce. All three precious metals ended the week lower.