Gold prices remained under pressure during Friday morning’s Asian trading session (November 13), hovering around US$3,880 per troy ounce following a sharp decline in the previous session. The precious metal hit its lowest level in over a year, driven by a strengthening U.S. dollar and growing expectations that the Federal Reserve will further tighten its monetary policy.
Downward pressure on gold intensified after U.S. consumer inflation for October came in higher than anticipated. This has fueled concerns that inflation remains difficult to contain, suggesting that interest rates could stay higher for longer. Meanwhile, rising U.S. Treasury yields have further diminished the appeal of gold, an asset that yields no return.
Separately, a surge in oil prices—spurred by escalating geopolitical tensions in the Middle East—has added to global inflationary concerns. Although geopolitical uncertainty typically boosts demand for safe-haven assets like gold, the strengthening dollar and the prospect of higher interest rates are currently exerting a more dominant influence on market movements.
As the week draws to a close, investor attention is focused on the U.S. Producer Price Index (PPI) data, scheduled for release on Friday evening. Should producer inflation exceed forecasts, the dollar could strengthen further, extending the pressure on gold. Conversely, a PPI reading that falls below expectations could pave the way for a price recovery following the sharp losses seen in recent sessions. (CP)