Gold clings to $4,000 as December Fed hike bets firm
Bullion near $4,060 an ounce after a 2.6% slide as traders fully price a December hike
Dubai: Gold held its losses on Wednesday as hot US inflation data and hawkish Federal Reserve remarks strengthened bets on a December rate hike. Bullion traded near $4,030 an ounce after falling 2.6 per cent in the previous session. Spot gold edged up 0.85 per cent to $4,057.01 as of 11:00 am Dubai time.
In the UAE, 24K gold is being priced at Dh487.75 per gram versus Dh485.00 yesterday, 22K at Dh451.50, 18K at Dh371.25 and 14K at Dh289.50 versus Dh288 in the previous close.
Traders now fully price a quarter-point Fed hike in December. The US consumer price index for October came in hotter than expected on November 10. Treasury yields and a dollar gauge held steady after surging that day. Higher borrowing costs weigh on gold because it pays no interest. A stronger dollar would make it costlier for most buyers.
According to Bloomberg, Chicago Fed President Austan Goolsbee called the October report “borderline disturbing”. “We’ve got a real inflation issue on our hands,” he said. Dallas Fed President Lorie Logan sees the need for at least two quarter-point increases, possibly at a quicker pace than this fall. Governor Christopher Waller earlier floated a half-point hike in December.
Dilin Wu, research strategist at Pepperstone, expects pressure to persist. “I think gold is facing a tougher road in the near term,” Wu notes. Hot inflation has revived the possibility of a 50 basis point move, while a firmer dollar and rising yields hinder any recovery.
Gold “could come under pressure whether risk assets rise or fall”, Wu warns. An equity sell-off over AI financing worries or a disappointing Anthropic IPO could force investors to sell gold to raise cash. Strong equity gains could dull its appeal as investors favour riskier assets. A surge in oil prices from geopolitical escalation could revive inflation fears and support the dollar.
“I’d watch $4,000 closely,” Wu says. A decisive break could open the door to $3,960. Gold needs to reclaim $4,100 to $4,110 to rebuild bullish momentum. Wu remains “constructive on gold over the medium term”, backed by central bank demand and persistent fiscal uncertainty.
