Gold holds near $4,000 as traders fully price December Fed hike
Gold steadied near $4,000 an ounce on Wednesday after a 2.6 per cent slide, as traders moved to fully price a quarter-point Federal Reserve rate increase in December. Spot gold edged up 0.85 per cent to $4,057.01 by 11:00 am Dubai time, leaving it close to the $4,000 line that Pepperstone research strategist Dilin Wu said is worth watching closely.
The trigger was October US consumer price inflation, which came in hotter than expected on November 10 and sent Treasury yields and the dollar higher. Higher borrowing costs weigh on gold because it pays no interest, and a stronger dollar makes it costlier for most buyers. Chicago Fed President Austan Goolsbee called the report "borderline disturbing" and said there is "a real inflation issue on our hands". Dallas Fed President Lorie Logan sees the need for at least two quarter-point increases, possibly at a quicker pace than this fall, while Governor Christopher Waller earlier floated a half-point move in December.
Buyers in the UAE are paying Dh487.75 a gram for 24K gold, up from Dh485.00 yesterday, with 22K at Dh451.50, 18K at Dh371.25 and 14K at Dh289.50 against Dh288 at the previous close.
Wu expects the pressure to persist. "I think gold is facing a tougher road in the near term," she said, warning bullion "could come under pressure whether risk assets rise or fall" — an equity sell-off over AI financing worries or a disappointing Anthropic IPO could push investors to sell gold for cash, while strong equity gains could dull its appeal. "I'd watch $4,000 closely," she said, adding that a decisive break could open the door to $3,960, while gold needs to reclaim $4,100 to $4,110 to rebuild bullish momentum. She remains "constructive on gold over the medium term", citing central bank demand and persistent fiscal uncertainty.
