Gold futures settled lower on Thursday as the dollar strengthened and bond yields rebounded, after data showing a slightly bigger than expected increase in U.S. consumer prices raised concerns about interest rates.
The dollar index surged to 106.50, gaining more than 0.6%.
Gold futures for December ended lower by $4.30 at $1,883.00 an ounce.
Silver futures for December ended down $0.174 at $21.959 an ounce, while Copper futures for December settled at $3.5910 per pound, down $0.0210 from the previous close.
Treasury yields regained ground following a two-day pullback. The rebound by yields comes after the Labor Department’s report showed U.S. consumer prices rose by slightly more than expected in the month of September.
The report said the consumer price index climbed by 0.4% in September after increasing by 0.6% in August. Economists had expected consumer prices to rise by 0.3%.
The report also said the annual rate of consumer price growth was unchanged at 3.7%, while the annual rate of core consumer price growth slowed to 4.1% in September from 4.3% in August.
The Labor Department also released a separate report showing first-time claims for U.S. unemployment benefits came in at 209,000 in the week ended October 7th, unchanged compared to the previous week’s revised level. Economists had expected jobless claims to inch up to 210,000 from the 207,000 originally reported for the previous week.
“Fed rate hike fears are back on the table but that doesn’t mean they will hike rates before the end of the year,” says Edward Moya, Senior Market Analyst at OANDA. “Gold’s short-term outlook still remains bullish given the US growth is quickly cooling and over all the uncertainty with all the geopolitical risks,” he adds.