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Gold Falls Below $4,000 as Inflation Fuels Fed Rate-Hike Bets
Spot gold declined 1.1% on November 11, 2026, extending the previous session's selloff as stronger-than-expected U.S. inflation lifted the dollar and increased expectations of further Federal Reserve tightening. Silver and palladium advanced despite gold's weakness.
Key Points
- Gold retreats: Spot gold fell 1.1% to $3,986.79/oz at 1:51 p.m. ET, while December futures settled 0.7% lower at $4,000.50/oz.
- Inflation exceeds forecasts: U.S. consumer prices rose 0.4% in October, compared with economists' expectations of 0.3%.
- Fed expectations shift: Market-implied odds of a 50-basis-point December rate increase rose to 12.9% from zero before the inflation report.
- Other precious metals: Silver gained 0.7% to $51.88/oz, while palladium rose 1.8% to $1,043/oz.
MONTREAL (Scrap Monster): Gold prices extended their decline on Wednesday, November 11, 2026, as stronger-than-expected U.S. inflation and hawkish Federal Reserve commentary boosted the dollar and raised expectations of a larger interest-rate increase in December, Reuters reported.
Spot gold fell 1.1% to $3,986.79 per ounce as of 1:51 p.m. ET (18:51 GMT), after reaching $4,066.77 earlier in the session. The decline followed Tuesday's nearly 3% selloff. U.S. gold futures for December delivery settled 0.7% lower at $4,000.50 per ounce.
Higher U.S. Inflation Strengthens Fed Rate-Hike Expectations
U.S. consumer prices increased 0.4% in October, exceeding the 0.3% rise forecast by economists surveyed by Reuters.
"CPI came out a little hotter than expected, and the market is interpreting that it warrants higher rates at the December meeting," said Bob Haberkorn, senior market strategist at StoneX.
Before the inflation report, Federal Reserve Governor Christopher Waller indicated that an October core inflation reading of 0.3% would lead him to consider a 50-basis-point rate increase in December.
Markets subsequently priced in an 87% probability of a 25-basis-point increase, while the implied likelihood of a larger 50-basis-point move climbed to 12.9% from zero before the CPI release.
The shift in interest-rate expectations helped lift the U.S. dollar index to its highest level since April 2025.
A stronger dollar makes dollar-denominated bullion more expensive for buyers using other currencies. Higher interest rates also increase the opportunity cost of holding gold, which pays no interest.
ScrapMonster Edge: Gold's Price Decline Reflects Monetary-Policy Pressure
The immediate pressure on gold came from changing interest-rate expectations and a stronger dollar. The market's reassessment followed the October inflation report, while central-bank buying remained a supporting factor.
Industry takeaway: For precious-metal recyclers, refiners and bullion dealers, the spot gold decline is a relevant valuation signal. Actual gold scrap buying prices also depend on purity, recoverable metal content, refining costs and buyer terms.
Central Bank Purchases Continue to Support Gold
Despite the near-term pressure from interest rates and the dollar, Haberkorn pointed to continued purchases by China, a major bullion consumer, and other central banks.
"That's really kept the floor on gold despite the short-term fundamental news, which is the Fed and interest rates working against it," he said.
Silver and Palladium Rise Despite Gold's Decline
Spot palladium advanced 1.8% to $1,043 per ounce after reaching its highest level since October 22.
Deutsche Bank analysts, however, warned that the palladium market could be approaching a structural change as declining autocatalyst demand intersects with recovering secondary supply.
The analysts suggested that these developments could shift the market from a prolonged period of scarcity toward a persistent surplus.
Spot silver increased 0.7% to $51.88 per ounce.
Courtesy: www.reuters.com