Gold slips as higher oil, US inflation data bolster Fed hike bets

Gold prices plummeted on Friday as elevated oil prices and strong US inflation data reinforced the likelihood of another rate hike from the Federal Reserve later in the year. Spot gold fell 0.5% to $4,000.54 per ounce by 0511 GMT, while December delivery futures for US gold dropped 0.5% to $4,010.10. Bullion was on track for a second straight monthly decline.

Analyst Tim Waterer noted, "Gold’s slide is posing serious questions about technical support around the $4,000 level. While dip buying has previously limited falls, it remains to be seen whether value buying will emerge to support gold." The latest US macro data, including higher inflation, indicated the Federal Reserve remained on course for a potential December hike.

Inflation accelerated in September due to increased costs for gasoline and other goods, bolstering expectations of a December rate increase. Higher interest rates make non-yielding bullion less appealing to investors. Traders now believe there is a 75% chance of a December rate hike, according to the CME’s FedWatch Tool. Oil prices surged on Friday, poised for a fourth consecutive monthly increase, due to a tanker attack in the Strait of Hormuz, which raised supply concerns stemming from the US-Israeli conflict with Iran.

Meanwhile, annual core inflation in Japan's capital significantly surpassed the central bank’s 2% target in October, data revealed on Friday, indicating growing price pressure. Silver, platinum, and palladium also suffered losses, sliding 1.6%, 1.9%, and 1.4% respectively, all heading towards weekly and monthly declines.