Gold Futures Settle Lower As Dollar Rises After Inflation Data

Gold prices fell on Thursday as the dollar rebounded from recent losses, and bond yields moved higher.

The dollar index rose to 103.56, gaining nearly 0.8%. The dollar surged as the Federal Reserve’s preferred measure of inflation rose in line with expectations in October, supporting expectations that the central bank will leave rates unchanged for some time.

Bond yields hardened across regions and tenors, dampening the sentiment for the yellow metal. Ten-year sovereign bond yields increased more than 1% in the U.S., Germany and France while it hardened more than 3% in the U.K.

The increase in treasury yields comes even though the Commerce Department released a report showing consumer price growth in the U.S. slowed in line with economist estimates in the month of October.

Gold futures for February ended down $9.90 at $2,057.20 an ounce.

Silver futures for March ended higher by $0.217 at $25.660 an ounce, while Copper futures for settled at $3.8505 per pound, gaining $0.0250.

The Commerce Department report said the annual rate of consumer price growth decelerated to 3% in October from 3.4% in September. The slowdown matched expectations.

Core consumer price growth also slowed in line with estimates, slipping to 3.5% in October from 3.7% in September. Core consumer prices exclude food and energy prices.

The month-on-month PCE price index, which was seen dropping to 0.1%, from 0.4% in the previous month actually recorded a flat reading. The core component of the same reducing as expected to 0.2%, from 0.3% in the previous period.

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