Gold Holds Near Eight-Week Low as Dollar Strengthens
Gold held a four-day decline as a sharp dollar rally weighed on the metal, even as U.S. inflation data supported the case for a Federal Reserve interest rate cut next month.
Gold steadied after a 1% decline in the previous session that pushed it to an eight-week low. The dollar gauge had risen to a two-year high on expectations that President-elect Donald Trump’s victory would boost economic growth and corporate profits. A stronger greenback makes commodities priced in the currency more expensive for most buyers.
U.S. consumer price data fell Wednesday, in line with expectations on a key basis, although the three-month annualized core interest rate rose. Overall, the figures support the possibility of a Fed cut by mid-December, with swaps traders pricing that at more than 80% probability. Lower borrowing costs tend to benefit gold, which pays no interest. The precious metal has fallen more than 7% from a record high hit on Oct. 31, with the decline accelerating after Trump’s White House victory. Prices are still up about 25% this year, supported by the Fed’s monetary easing cycle, central bank purchases and rising geopolitical and economic risks that have boosted demand for safe-haven assets.
Spot gold was little changed at $2,574.55 an ounce at 8:25 a.m. in Singapore. The Bloomberg Dollar Spot Index was steady, after hitting its highest since 2022 on Wednesday. Silver edged up, palladium was flat and platinum eased.
Source: Bloomberg
