Spot gold was 0.7% lower at $2,580.39 per ounce after reaching a near two-month low earlier in the session
Gold prices extended losses for the fourth consecutive session on Wednesday, weighed down by a stronger U.S. dollar and higher bond yields on news that October consumer prices rose as expected.
The U.S. Labor Department also reported slower progress toward low inflation since mid-year, which could result in fewer interest rate cuts from the Fed next year.
Spot gold was 0.7% lower at $2,580.39 per ounce by 1849 GMT, after reaching a near two-month low earlier in the session.
U.S. gold futures settled 0.8% lower at $2,586.50 per ounce.
The dollar reached near a seven-month high against major currencies, while benchmark U.S. 10-year yield jumped.
The CPI rose but met expectations, leading to a mixed impact on gold prices. Markets have increased their bets on a potential 25 bps interest rate cut in December, Zain Vawda, market analyst at MarketPulse by OANDA, said.
Traders are pricing in an 82% probability of a Fed rate cut in December, up from nearly 58% before the data, shows CME FedWatch tool.
However, investors believe Trump’s presidency might cause the Federal Reserve to pause its easing cycle if inflation rises after expected new tariffs.
In the short term, there is potential for gold prices to slightly recover to nearly $2,650 per ounce, but they may drop again afterward, Vawda added.
Looking ahead, the U.S. PPI and weekly jobless claims are due on Thursday, with retail sales data on Friday. Remarks from Fed Chair Jerome Powell and other central bank officials are also on the radar.
Gold bulls’ next upside price objective is to produce a close above solid resistance at $2,700. Bears’ next near-term downside price objective is pushing futures prices below solid technical support $2,500, Jim Wyckoff, a senior market analyst at Kitco Metals, said in a note.
