Gold stays below $4,000 as December Fed hike bets strengthen
Gold remained below $4,000 an ounce on Thursday after hotter-than-expected US inflation and hawkish Federal Reserve comments strengthened expectations for a December rate increase. The pressure reflects gold’s vulnerability to higher interest rates, which make the non-yielding metal less attractive to hold.12
This brief is being refreshed as the reporting or market odds change.
TL;DR
- The inflation surprise and hawkish remarks have shifted the near-term pressure onto gold by strengthening expectations for higher rates, which increase the opportunity cost of holding bullion.2
- Prediction-market pricing suggests a rebound to $4,100 this week is possible but not the expected outcome, even though the metal is trading below $4,000.M41
Still to come
- US producer-price data is due Friday, following the hotter consumer-inflation reading. The release could add evidence for investors assessing the Fed’s rate path.
- The Fed’s December meeting remains the next policy decision point, with traders pricing a rate increase while officials’ comments differ on the need for further tightening.
The latest move extends a sharp reversal. On Wednesday, Reuters reported that spot gold had edged up to $4,043.62 an ounce after falling nearly 3% in the previous session. By Thursday, gold was again below $4,000, and Bloomberg reported it had lost more than 1% in the prior session.12
The shift followed October inflation data that came in stronger than expected and comments from Fed officials emphasizing the need to curb inflation. Reuters reported that traders saw a 100% probability of a December rate increase, while a larger half-point move also drew attention. Fed officials have not all made the same case: ETMarkets reported that Vice Chair for Supervision Michelle Bowman flagged persistent inflation but stopped short of advocating another increase, and expected price pressures to moderate next year.2X3
Prediction-market pricing points to limited expectations for a near-term rebound: as of November 12, traders assigned about an 11% implied probability to gold reaching $4,100 at any point during the week of November 9. That threshold is above Thursday’s reported level, showing how the market prices the chance of a recovery even as rate expectations weigh on bullion.1M4
Posts on X (5)
Selected for this story
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X1
A360 Global
@AtlasNewsen
US Treasury yields rose Tuesday after Federal Reserve Governor Christopher Waller backed a December rate increase, with October inflation data ahead.
#TreasuryYields
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X2
ETMarkets
@ETMarkets
Federal Reserve Bank of Philadelphia President Anna Paulson said on Tuesday that further interest rate increases would be needed to bring inflation back to the central bank's 2% target, signalling support for a continued tightening of monetary policy, Reuters reported.
#ETMarkets #FED
Read more here
economictimes.indiatimes.com
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X3
ETMarkets
@ETMarkets
Federal Reserve Vice Chair for Supervision Michelle Bowman on Tuesday highlighted persistent inflation as a key concern for US monetary policy, while stopping short of advocating further interest-rate increases. She said she expects price pressures to moderate next year as the impact of recent economic and geopolitical shocks fades.
#ETMarkets
Read more here
economictimes.indiatimes.com
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X4
Mortgage Professional America Magazine
@MPAMagazineUS
Christopher Waller of the Federal Reserve Board says a December rate hike remains likely, with persistent inflation pressures raising the possibility of a larger move as policymakers seek to maintain credibility and bring inflation closer to target.
www.mpamag.com
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X5
Zoraida Sánchez
@Pettunia14
"Core CPI rises 0.3% in October for third straight month
Market bets on 50-basis-point December hike approach 15% by midmorning
2-year Treasury yield posts biggest rise since early April 2025.
Odds the US Federal Reserve may raise interest rates half a percentage point at its December meeting jumped on Tuesday after new data showed prices rising faster than expected and clearing the bar set by one key policymaker for considering a quicker pace of rate hikes.
The Consumer Price Index rose 0.4% month over month in October, a drop from the 0.6% in September as energy inflation receded, but the index excluding volatile food and energy prices rose 0.3% for the third month in a row, evidence of persistent "core" inflation that also showed signs of spreading through the economy.
In comments overnight in London, Fed Governor Christopher Waller said that a core reading of 0.3% for October would prompt him to consider a half point hike at the Fed's December 8-9 meeting. With a quarter-point rate hike all but assured, market bets on a larger increase were rapidly building amid a broad bond market selloff and at midmorning were close to 15%.
If core consumer prices rise 0.3% or more from September, "a stronger policy move may be needed," Waller said at a conference hosted by King's Business School and the Money Macro & Finance Society. "In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting."
Sticking with a smaller rate increase, Waller said, risks hurting the Fed's inflation-fighting credibility given inflation that's too high and appears to be broadening out. Economists had expected core monthly inflation to drop to 0.2% in October.
The CPI data and Waller's comments drove a powerful selloff in the US Treasury market, with the yield on 2-year notes — a proxy for Fed policy expectations — rising by the most since early April 2025.
Dallas Fed President Lorie Logan and Fed Vice Chair for Supervision Michelle Bowman speak later on Tuesday.
The October inflation data follow midterm elections that revolved around cost-of-living issues and ended in a dramatic rebuke of President Donald Trump and the Republican party.
The October data showed unexpected jumps in auto insurance, public transportation and medical services that could land particularly hard on middle- and lower-income households that policymakers see as the weak link in an overall solid consumer spending picture."
www.reuters.com
Sources
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Gold Holds Below $4,000 as Market Looks Ahead to Fed Rate Hike · Bloomberg Business · Nov 12
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Gold edges higher after sharp selloff, Fed hike bets weigh · Reuters · Nov 11
AI-generated from the linked reporting and prediction-market data. Market prices reflect traders’ expectations and can change.