Gold holds loss near $4 000 on hot US inflation, Fed remarks

Résumé détaillé

Gold inched up 0.1% to $4 038.55 an ounce as of 9:31 a.m. Singapore time.

Gold maintained losses after a high US inflation print and hawkish remarks from Federal Reserve officials reinforced bets for an interest rate hike in December.

Bullion traded near $4 030 an ounce, after falling 2.6% in the previous session. Yields on Treasuries across the curve and a gauge of the dollar were steady after surging on Tuesday, when the US consumer price index for October came out hotter than expected.

Traders are now fully pricing in a quarter-point rate hike by the Federal Reserve in December. Higher borrowing costs weigh on gold as it doesn’t pay interest, while a stronger greenback makes it more expensive for most buyers.

Despite the headwinds, the precious metal has held above the critical level of $4 000 an ounce, suggesting underlying support from haven demand. Central-bank buying also remains intact, even as persistent inflation and expectations for tighter monetary policy cloud the near-term outlook.

“Prices have held up well despite the equity market correction as gold appears to be shifting away from its role as a liquidity provider,” Suki Cooper, global head of commodities research at Standard Chartered Plc, wrote in a note.

Meanwhile, Federal Reserve Bank of Chicago President Austan Goolsbee called the October consumer price report “borderline disturbing.”

“We’ve got a real inflation issue on our hands that has been developing and we’re going to have to deal with that,” he said.

Dallas Fed President Lorie Logan said she still sees the need for at least two quarter-point rate increases, and the pace of those hikes may need to be quicker than the Fed has been this fall. Fed Governor Christopher Waller earlier floated the possibility of a half-point hike in December.

Gold inched up 0.1% to $4 038.55 an ounce as of 9:31 a.m. Singapore time. Silver was up 1% at $52.06 an ounce, after falling 3.5% in the earlier session. Platinum and palladium were slightly higher. The Bloomberg Dollar Spot Index, a gauge of the US currency, was marginally lower.

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