Gold Continues Decline Amid Dollar Strength and Inflation Data

Gold futures retreated for a fourth consecutive session, with the most active December contract settling at $2,570.40, down 1.01%. The precious metal has now surrendered over $200 in value during this sustained downturn, decisively breaking below the anticipated $2,600 support level and suggesting potential for further declines.

Multiple factors are contributing to gold's current weakness. The metal's appeal as a non-yielding safe-haven asset has diminished following Donald Trump's victory in the U.S. presidential election, which triggered a significant rise in Treasury yields. This shift in market dynamics has prompted investors to seek yield-bearing alternatives.

October's inflation data, released today by the U.S. Bureau of Labor Statistics, showed consumer prices rising 2.6% annually, up from September's 2.4% reading and aligning with economists' forecasts. Core inflation, which excludes volatile food and energy costs, remained steady at 3.3%, also meeting market expectations.

Despite these inflation metrics, market sentiment suggests the Federal Reserve may continue its dovish stance. According to the CME's FedWatch Tool, traders are pricing in a 79% probability of a 25-basis point rate cut at December's Federal Open Market Committee meeting, which would mark the Fed's third consecutive reduction in interest rates.

Wishing you, as always good trading,