Gold falls below $4,000 as dollar strengthens and Fed rate hike odds rise

Higher-than-expected US inflation and hawkish Fed comments have pushed the dollar toward a 19-month high, while gold has slid to a one-week low

Gold fell below $4,000 an ounce on Thursday, hitting its lowest level in more than a week. A stronger US dollar and rising expectations that the Federal Reserve will raise interest rates have reduced demand for the precious metal.

Higher-than-expected inflation data and hawkish monetary policy messages from central bank officials drove gold lower for a third consecutive session. At 05:24 GMT, spot gold was down 0.43% at $3,970.59 an ounce. Silver fell 0.69% to $51.305.

The US dollar index remained below 103, though it is close to its highest level since April 2025.

Inflation beats expectations

US consumer prices rose 0.4% month on month in October. This exceeded the market forecast of 0.3%, although it was slower than the 0.6% increase in September.

Fed official backs December rate hike

Fed official Christopher Waller said he supports raising interest rates in December. He stressed that if inflation turns out stronger than expected, the likelihood of a larger hike would increase.

Waller said he leans toward a 25 basis point increase even if monthly inflation improves. In his words, a significantly stronger reading could make it necessary to consider a 50 basis point hike.

What the market is watching

Investors are focused on upcoming US data, including producer prices, weekly jobless claims and existing home sales, for fresh clues on the central bank’s policy path.

Higher interest rates typically weigh on gold, as they raise the opportunity cost of holding the non-yielding metal.

Meanwhile, the US Bureau of Labor Statistics has not published the annual headline inflation figure for October. The 2025 government shutdown disrupted the collection of survey data.