Gold Steadies After Sharp Selloff

(RTTNews) - Gold prices were a tad higher on Wednesday, after having tumbled in the previous session on concerns over rising inflationary pressures and expectations of another Federal Reserve rate hike in December.

Spot gold edged up 0.4 percent to $4,048 an ounce after a nearly 3 percent decline in the previous session, weighed down by a stronger dollar and rising Treasury yields. U.S. gold futures were up 0.7 percent at $4,057 an ounce.

The U.S. dollar held close to the year's highs and the 10-year Treasury yield spiked by about 12 basis points to 5.0 percent after stronger-than-expected U.S. consumer price inflation data fueled bets that the Federal Reserve would need to deliver more aggressive interest rate hikes over the coming months.

Overnight data showed consumer prices rose 0.4 percent in October, exceeding expectations of a 0.3 percent increase but slowing from September's 0.6 percent rise.

Core consumer prices, which exclude food and energy, rose 0.3 percent month-on-month while economists had expected a 0.2 percent rise. Annual inflation figures were unavailable due to the government shutdown in October 2025.

Hawkish comments from Federal Reserve officials also fueled concerns about further interest rate hikes.

Fed Governor Christopher Waller said at a conference on Tuesday that he is "leaning toward" a rate hike in December and would support a half-point increase if monthly core inflation remained at around 0.3 percent or higher.

Dallas Fed President Lorie Logan said the Fed will need at least two additional quarter-point rate increases to prevent price pressures from becoming entrenched.

Fed officials Austan Goolsbee and Tom Barkin warned on Monday that persistent inflation and strong investment in artificial intelligence infrastructure could complicate the central bank's monetary policy outlook.

Money markets are now pricing in a 25-bps rate hike at the Fed's upcoming policy meeting next month, with some chance of an even larger move.

Some analysts expect the Fed to raise its benchmark interest rate by 0.25 percentage point each in December, January and March.

Ahead of the Fed's monetary policy meeting next month, CME Group's FedWatch Tool indicated a 91 percent chance the Fed will raise rates by a quarter point at its December meeting.

Oil prices were moving higher in early European trading, rebounding after a two-day decline as fresh tanker attacks in the Strait of Hormuz raised concerns over global oil supplies.