Gold fell for a fifth straight time on Thursday to an eight-week low, pressured by a stronger U.S. dollar and rising Treasury yields amid uncertainty over the pace of Federal Reserve interest rate reductions.
Spot gold was down 0.6% at $2,559.39 an ounce, by 0244 GMT, after hitting its lowest level since September 19 earlier in the session. U.S. gold futures fell 0.9% to $2,564.00.
The U.S. dollar rose to a one-year high, making gold more expensive for foreign buyers, while the Treasury yield rose to its highest level since July. [USD/] [US/]
“Right now, gold is just being pushed by the dollar and yields, which is creating this mechanical short-term decline,” said Kyle Rodda, financial markets analyst at Capital.com.
“While last night’s inflation data suggests the Fed may be able to cut things slightly next month, next year is driven by expectations of higher inflation and therefore fewer cuts. rate.”
Data released Wednesday showed U.S. consumer prices rose as expected in October, and progress toward low inflation has slowed in recent months.
Gold is seen as a hedge against inflation, but rising interest rates are reducing the appeal of this yield-free asset.
Meanwhile, Fed officials remain cautious about future rate cuts, citing potential risks to inflation.
While St. Louis Fed President Alberto Musalem expects inflation to gradually decline, Dallas Fed President Logan warned of excessive easing that could revive inflationary pressures.
Investors await data on the producer price index (PPI) and weekly US jobless claims, both due at 1:30 p.m. GMT, as well as comments from Fed Chairman Jerome Powell, who is due to speak later today.
Spot silver fell 0.9% to $30.05 an ounce, its lowest level since September 19. Platinum lost 0.5% to $933.10 and palladium fell 0.8% to $925.75.
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