Gold plummeted! Experts reveal the "future" in one sentence
Quick Look
- The U.S. consumer price index increased 0.4% month-on-month in October, higher than expected, boosting the dollar and U.S. bond yields and reinforcing expectations that the Federal Reserve will raise interest rates more aggressively.
- Spot gold fell 2.7% to $4,028.39 an ounce, while silver, platinum and palladium also fell.
AI-generated summary
Why It Matters
The U.S. Department of Labor announced that the consumer price index increased by 0.4% in October, higher than the 0.3% expected by economists. Fed Governor Waller said that if the CPI report shows that inflation is overheating, he will support more aggressive action.
Gold prices fell on Tuesday (10th). (Bloomberg file photo)
[Financial Channel/Comprehensive Report] U.S. inflation data was hotter than expected, boosting the U.S. dollar and U.S. bond yields, and also strengthening the possibility of the Fed raising interest rates more aggressively this year. The price of gold fell on Tuesday (10th), and experts believe that this is a short-term negative for gold because the inflation data is slightly higher than expected.
Spot gold fell 2.7% to $4,028.39 an ounce.
U.S. gold futures for December delivery fell 2% to $4,030.20 an ounce.
"Reuters" reported that the U.S. Department of Labor announced that the U.S. consumer price index (CPI) increased by 0.4% monthly in October, higher than economists' forecast of a monthly increase of 0.3%, but lower than September's monthly increase of 0.6%.
Marex analyst Edward Meir believes that this is a short-term negative for gold because the inflation data is slightly higher than expected.
After the release of inflation data and remarks by Fed Governor Christopher Waller, the market began to increase bets on the Fed raising interest rates by 2% in December. Waller previously said he would support more aggressive action if the CPI report showed overheating.
According to the CME Group's FedWatch tool, the market has fully priced in expectations for a 1-digit rate hike by the Fed, while the probability of a 2-digit rate hike has risen to 10% from 0% before the data was released.
Standard Chartered Bank said in a report: "The price of gold continues to stand above the key level of US$4,000 per ounce. Crude oil, inflation risks and the stock market continue to dominate gold trading trends, and the market focus is on the interest rate hike expectations of the Fed's December meeting."
Other precious metals trading
Spot silver fell 3.95% to $51.30 an ounce.
Spot platinum fell 2.7% to $1,534.38 an ounce.
Spot palladium fell 1.2% to $1,028.83 an ounce.
What to Watch
AI outlook — possibilities, not facts
The market will continue to focus on expectations for an interest rate hike at the December Fed meeting
Likely · Within weeks
Open Questions
- Will the Fed finally raise interest rates by 2 points at its December meeting?
- Will gold prices continue to fall?
