Gold prices dropped on Thursday, reaching their lowest point in over a week. The decline came after stronger-than-expected US inflation data and hawkish comments from Federal Reserve officials boosted the dollar and increased expectations of a rate hike next month.
Spot gold fell 0.2% to $3,981.49 per ounce by 0310 GMT, while US gold futures for December delivery dropped 0.3% to $3,987.50. The dollar hit a 19-month high against major currencies, making gold more expensive for investors holding other currencies.
Ilya Spivak, head of global macro at Tastylive, noted that gold has seen a significant pullback in recent days due to rising rate hike expectations. He highlighted that the market is struggling to find direction around the $4,000 mark.
Analysts at OCBC noted that while the near-term outlook for gold is uncertain, they remain optimistic about its medium-term prospects. They pointed to oil prices, yields, and the US dollar as key drivers in the coming days.
Among other precious metals, spot palladium climbed 1% to $1,037.25 per ounce.