Gold drops 1% on hawkish Fed comments ahead of US inflation data

Business Recorder reported that spot gold fell 1.6% to $4,071.07 per ounce by 1153 GMT on Tuesday, while US December gold futures lost 0.9% to $4,079.80. Bullion came under pressure after Federal Reserve Governor Christopher Waller said borrowing costs should rise next month and a half-point increase could be considered if inflation worsens.

Markets are awaiting US consumer price data due later Tuesday and producer price figures on Friday. Traders now assign about a 99% probability to a December Fed rate increase, according to CME’s FedWatch tool; higher interest rates tend to make gold, which pays no yield, less attractive. Spot silver also declined 2.1% to $52.27 per ounce, while palladium fell 1.3% to $1,027.97.