FX.co ★ Gold Pressured by Fed Rate Hike Bets

Gold traded below $4,050 an ounce on Wednesday after sliding nearly 3% in the previous session, pressured by hawkish remarks from Federal Reserve officials and stronger-than-expected US inflation data that reinforced expectations of a December rate hike. US headline inflation eased to 0.4% month-on-month in October from 0.6% in September, but still exceeded the market consensus of 0.3%. At the same time, core inflation held steady at 0.3% for a third straight month, above forecasts of 0.2% and underscoring persistent underlying price pressures. Fed Governor Christopher Waller signaled support for additional monetary tightening in December, noting he would back a 50-basis-point move if inflation continues to accelerate. Dallas Fed President Lorie Logan likewise suggested that more forceful rate increases may be required to rein in inflation. As a result, markets are now assigning roughly a 91% probability to a rate hike next month, up from 84% in the prior session.