Gold prices fell on Thursday (today), reaching their lowest level in more than a week as the US dollar strengthened.
US inflation and statements from Federal Reserve officials increased expectations of another interest rate hike next month.
Spot gold fell 0.2 per cent to $3,977.99 per ounce. Earlier, it touched its lowest level since November 4.
US gold futures for December delivery also declined by 0.4 per cent to $3,983.20 per ounce.
Meanwhile, the US dollar reached a 19-month high against other major currencies.
Ilya Spivak, head of global macro, said gold prices had fallen sharply in recent days.
He linked the decline to US inflation and growing expectations of higher interest rates.
However, he said the market appeared uncertain about whether gold prices would fall further.
Federal Reserve officials also indicated that tighter monetary policy might be necessary.
These developments increased expectations of a half percentage interest rate increase next month.
According to the CME FedWatch Tool, markets were fully pricing in a rate hike next month. Another increase was also expected in March.
Gold prices in Pakistan
Gold prices also declined in Pakistan on November 11, following losses in the international market.
According to the All-Pakistan Gems and Jewellers Sarafa Association, 24-karat gold fell by Rs3,400 to Rs427,436 per tola.
The price of 10 grams dropped by Rs2,915 to Rs366,457.
Meanwhile, November 12 market placed 24-karat gold at approximately Rs425,000 per tola.
Investors are now awaiting Friday’s US Producer Price Index report for further inflation signals.
OCBC analysts said gold could move in either direction in the short term, depending on oil prices, bond yields and the dollar.
