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Gold prices fell for a third consecutive session on Thursday as the US dollar climbed to a 19-month high and stronger inflation revived expectations of another Federal Reserve interest-rate increase.
December COMEX gold futures dropped 1.6% to $3,936.40 an ounce at 09:03 GMT, compared with Wednesday's $4,000.50 settlement.
Spot bullion stood at $3,934.40 ten minutes later, after the futures contract touched an intraday low of $3,929.50.
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The slide has pushed gold below the psychologically important $4,000 level and put the market on course for another test of support.
Silver futures also retreated, falling 2.1% to $50.91 an ounce.
Tuesday's US inflation report changed the calculation for bullion investors.
Consumer prices rose 0.4% in October, against forecasts of 0.3%, while underlying inflation advanced 0.3%, exceeding expectations of 0.2%.
The dollar index reached 103.08 on Thursday, its highest in 19 months, before trading around 102.89 at 09:03 GMT.
A stronger dollar raises gold's price for buyers using other currencies, while higher Treasury yields make the metal less attractive because it pays no interest.
ANZ analysts, in comments reported by The Wall Street Journal on Thursday, said persistent inflation and other signs of economic resilience could prompt the Fed to consider raising rates by half a percentage point in December.
That remains a risk scenario rather than the market's central expectation.
Traders were pricing roughly an 89% probability of a quarter-point increase, with an 11% chance of a larger move.
Inflation concerns have intensified following remarks from central bankers.
Chicago Fed President Austan Goolsbee told PBS NewsHour that October's inflation report was troubling, particularly because services inflation had yet to ease convincingly.
The prospect of tighter monetary policy is helping the dollar attract safe-haven demand even as the conflict in the Middle East continues to unsettle markets.
Haresh Menghani, writing for FXStreet on Thursday, argued that dollar strength, rising yields and the increasingly hawkish policy outlook left gold vulnerable to further losses.
However, the short-term sell-off does not necessarily settle bullion's longer-term prospects.
OCBC strategists Sim Moh Siong and Christopher Wong maintained a constructive medium-term outlook in research published earlier this month, citing central-bank buying and investment demand as potential support once the interest-rate environment improves.
The immediate area to watch is $3,930, identified by FXStreet as a technical retracement level.
A sustained break could bring $3,870 into focus, while recovering above $4,009 would be an early sign that selling pressure is easing.
Attention now turns to Friday's US Producer Price Index report, scheduled for 13:30 GMT, before the Fed's 8–9 December meeting.
A higher-than-expected reading could reinforce bets on tighter policy, while softer numbers might offer gold some respite.
For investors exploring how to invest in gold or comparing the best commodities trading platforms, the distinction between physical bullion and leveraged futures matters especially during sharp price swings.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
