Gold prices edged higher, climbing above US$3,900 per troy ounce in Friday’s (Nov 13) trading session, following a rebound from a more than one-year low reached the previous day. Spot gold stood at US$3,904.28 per troy ounce—up 0.7%—while December gold futures rose 0.6% to US$3,907.45. Despite this recovery, gold remains on track for a weekly decline of approximately 4%.
The recovery in gold prices comes as the US dollar remains relatively stable around the 103.20 level, following a gain of about 0.9% for the week. However, rising US Treasury yields and a stronger dollar continue to exert pressure on gold; the precious metal offers no yield, and a stronger dollar makes it more expensive for buyers using other currencies.
Downward pressure on gold has intensified since Tuesday, after US consumer inflation data came in higher than expected, leading the market to anticipate a tighter monetary policy from the Federal Reserve. US Treasury yields have also climbed significantly, with some tenors rising by more than 12 basis points—short-term bonds seeing the most pronounced increases.
Several Federal Reserve officials have signaled a hawkish stance. Chicago Fed President Austan Goolsbee emphasized the importance of curbing inflation before economic activity overheats, while San Francisco Fed President Mary Daly suggested that further interest rate hikes may still be necessary, given that inflationary pressures remain elevated.
Meanwhile, a renewed rise in oil prices has also drawn market attention. Brent crude climbed above US$95 per barrel after US President Donald Trump stated that Washington no longer requires a peace deal with Iran. Rising energy costs could further fuel inflationary pressures, ultimately reinforcing expectations for a more restrictive monetary policy. The market is now fully pricing in a 25-basis-point interest rate hike by the Federal Reserve in December, with some investors beginning to consider the possibility of a 50-basis-point increase. This environment continues to pose challenges for a recovery in gold, although a rebound from recent lows has provided some room for prices to potentially ease pressure in the short term.