Gold prices weakened during Tuesday’s trading session (November 10) ahead of the release of US inflation data, which serves as a key indicator for the Federal Reserve’s future policy direction. Spot gold fell 0.5% to approximately US$4,117.94 per ounce, following a partial reversal of the nearly 2% gain seen on Monday. The market is now awaiting the October Consumer Price Index (CPI)—the final major inflation reading before the Federal Reserve’s meeting on December 8–9.
Gold is facing pressure from growing expectations of interest rate hikes. The market has already priced in the possibility of a rate increase in December, while several Fed officials have reiterated concerns regarding inflation risks. This environment weighs on gold, as the asset does not yield returns when interest rates rise.
Comments from Chicago Fed President Austan Goolsbee and Richmond Fed President Tom Barkin have also drawn attention. Goolsbee highlighted potential inflationary pressures stemming from the expansion of the AI industry and broader price pressures, while the Fed has previously adopted a tighter policy stance to combat persistent inflation.
Meanwhile, investors continue to monitor developments regarding US-Iran tensions, the outlook for the AI industry, and gold purchases by central banks. After facing pressure throughout September and October, gold now requires a new catalyst to determine its next trajectory, even as the US dollar weakened slightly during Tuesday’s trading.
Newsmaker Analysis: The CPI serves as a critical short-term catalyst for gold. Inflation figures exceeding expectations could strengthen the case for interest rate hikes and exert downward pressure on gold, whereas lower-than-expected data might alleviate pressure stemming from the Fed’s policy stance. With the market lacking conviction regarding the year-end outlook, gold volatility is likely to increase following the release of the inflation data.