Gold falls below $4,000 ahead of US PPI data

Gold dropped 1.28% to $3,977.66 an ounce by 10:15 am PST on Thursday, its lowest point in more than a week, Mettis Global reported. A firmer US dollar and increased expectations of a Federal Reserve rate rise weighed on the metal ahead of Friday’s US Producer Price Index report.

US inflation data for October, released on Tuesday, came in above market expectations, while comments from Fed officials strengthened views that monetary policy could tighten further. The dollar reached a 19-month high against major currencies, making dollar-priced gold more expensive for buyers using other currencies; higher rates also increase the cost of holding gold, which does not generate yield. Spot palladium moved in the opposite direction, adding 1% to $1,037.25 an ounce.