Markets India

Gold prices dropped nearly 3% on Tuesday after the U.S. Consumer Price Index (CPI) rose more than expected, boosting dollar strength and Treasury yields.

Gold Plummets 3% as US Inflation Surpasses Forecasts

The sharp decline in gold followed a stronger-than-anticipated October CPI reading of 0.4%, surpassing forecasts of 0.3%. Spot gold fell 2.7% to $4,028.39 per ounce on November 10, while U.S. futures for December delivery dropped 2.0% to $4,030.20. The data increased the probability of a 50-basis-point Federal Reserve rate hike in December by 10 percentage points, from zero.

Investors are shifting toward higher-yielding assets as inflation concerns intensify, reducing gold's appeal as a hedge. A stronger dollar also pressures international buyers, while rising Treasury yields raise opportunity costs for holding non-interest-bearing bullion. Singapore’s announcement of a vaulting service for foreign central banks could reshape global competition in the precious metals trade.

The Monetary Authority of Singapore plans to lower taxes on gold market companies and launch its new vaulting service by December 2026, potentially capturing more business from traditional hubs like London and New York. However, risks remain if inflation persists, as aggressive Fed rate hikes could further weaken demand for the metal.

The Federal Reserve will review inflation data ahead of its December meeting. Singapore’s Monetary Authority plans to launch a vaulting service for bullion by late 2026 and implement tax cuts for gold market participants.

Gold's decline underscores growing investor confidence in rate hikes, with the Fed's next move shaping precious metals' future appeal.

Topics: Gold Market Trends, US Inflation Data, Fed Policy Impact, Precious Metals Trade, Central Bank Innovation

#GoldPricesDown #FedRateHikeSpeculation #PreciousMetalsTrade #SingaporeVaultingService

Source: LiveMint