Gold slides as US inflation data boosts rate-hike bet

Gold prices fell on Friday (Oct 14), adding to the weekly decline, as a hotter-than-expected US inflation reading cemented bets of another hefty Federal Reserve interest rate hike next month.

Spot gold fell 0.3 per cent to US$1,660.10 per ounce, as of 1.23 am GMT.

US gold futures dropped 0.6 per cent to US$1,666.80.

The dollar index was down about 0.1 per cent, while benchmark US 10-year Treasury yields were slightly off a 14-year peak touched on Thursday.

Data released on Thursday showed US consumer prices increased more than expected in September, as rents surged by the most since 1990 and the cost of food also rose, with core CPI jumping 6.6 per cent on an annual basis.

The Fed is seen delivering another large rate hike in three weeks’ time and ultimately lifting rates to 4.75-5 per cent by early next year, if not further, after the inflation report.

Although traditionally considered an inflation hedge, interest rate hikes to combat soaring prices have reduced bullion’s appeal since it yields no interest.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.12 per cent to 944.31 tonnes on Thursday.

Barrick Gold, the world’s second-largest gold miner, said on Thursday it expected full-year gold production to be at the lower end of its earlier forecast range.

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Gold prices steady ahead of US inflation data

Spot silver dipped 0.3 per cent to US$18.81 per ounce, platinum fell 0.5 per cent to US$891.67 and palladium was 0.3 per cent lower at US$2,101.77. REUTERS