US inflation hit gold: Sharp drop in gram and ounce prices

Consumer Price Index (CPI) in the USA increased by 0.4 percent monthly in October, exceeding market expectations. Inflation data that came above expectations strengthened the predictions that the Fed might raise interest rates and led to a sharp decline in gold prices. Ounce gold fell to 4 thousand 39 dollars, and gram gold fell to 6 thousand 511 liras.

SHARP DECLINE IN GOLD PRICES

Following the inflation data announced in the USA, selling pressure increased in the gold market. An ounce of gold fell to 4 thousand 39 dollars and lost more than 2.60 percent in value.

Domestically, gram gold was also affected by the decline. The price of gram gold dropped to 6 thousand 511 liras after the data was announced.

As of 16.48 TSI, ounce gold was traded at 4 thousand 60 dollars and gram gold was traded at 6 thousand 558 lira. As of the same hour, the dollar index reached 102, while the dollar/TL exchange rate remained at 50.23.

FED'S INTEREST RATE DECISION IS EXPECTED

The fact that inflation in the USA was above expectations changed the expectations regarding the Fed's interest rate decision in December.

According to market pricing, the probability that the Fed will raise interest rates at its December meeting and raise the policy rate to the range of 4.00-4.25 percent has increased to 97.8 percent.

In terms of the direction of gold prices, the Fed's interest rate decision and economic data from the USA are closely followed.