Gold prices reversed sharply on Tuesday, November 10, erasing the previous session's gains after hotter-than-expected US inflation data boosted Treasury yields and the dollar, reinforcing expectations of additional Federal Reserve tightening.
Spot gold was last seen at $4,054.90 per ounce, down 2% on the day, shortly after the release of the consumer price index (CPI). COMEX gold futures for December delivery traded at $4,060.80 by 13:58 GMT, down 1.3% from Monday's settlement of $4,114.50. The contract dropped from $4,080.40 to $4,052.20 in the first five minutes following the data and touched a low of $4,046.40.
The decline wiped out Monday's advance, when gold settled roughly 2% higher, extending its recovery from a yearly low of $3,870. Earlier in the Asian session, the metal had reached a three-week high of $4,149.
Why is gold price falling?
The US consumer price index rose a seasonally adjusted 0.4% in October, exceeding the Dow Jones consensus estimate of 0.3%, according to the Bureau of Labor Statistics. Core CPI, which excludes food and energy, increased 0.3% against forecasts of 0.2%. The BLS did not publish an annual rate because last year's government shutdown prevented the collection of October 2025 data.
Treasury yields jumped on Tuesday, with the 10-year yield climbing more than 7 basis points to 4.938% and the 2-year yield surging over 15 basis points to 4.698%. The US dollar index rose about 0.4% to near 102.0. Higher yields and a firmer dollar raise the opportunity cost of holding non-yielding bullion.
Gold was already under pressure before the release, down more than 1% heading into US trading hours. Selling intensified after hawkish remarks from Federal Reserve Governor Christopher Waller. In a speech in London, Waller said he was leaning toward a 25 basis point hike in December, but if core CPI came in “around 0.3 percent or even higher,” a 50 basis point hike should be considered.
What happens next?
Traders fully priced in a quarter-point increase at the Fed's December 8-9 meeting and put the odds of a half-point move at 14.7%, according to CME Group's FedWatch. The Fed held its target range at 3.75%-4.00% in October in a 10-2 vote.
Producer price data is due on Friday, while US bond markets are closed on Wednesday for Veterans Day, which could thin liquidity. Silver futures fell about 1.5% to near $51.80, while Bitcoin was down about 2% near $73,800.
Should you buy gold now?
The hotter print leaves gold sensitive to Treasury yields, the dollar, and Friday's PPI data ahead of the Fed's December meeting. Investors weighing exposure can read our guide to compare the best gold trading platforms.
This article is for informational purposes only and does not constitute financial advice.
