Gold prices dropped for a third straight session on Thursday, falling 1.6% to $3,936.40 per ounce in December COMEX futures after settling at $4,000.50 a day earlier. Spot bullion traded at $3,934.40, and the contract touched an intraday low of $3,929.50. Silver futures also fell 2.1% to $50.91 an ounce.
The slide came as the US dollar index climbed to 103.08, its strongest level in 19 months, before easing to around 102.89. The move followed Tuesday's US inflation report, in which October consumer prices rose 0.4% versus a 0.3% forecast, while core inflation advanced 0.3% against expectations of 0.2%.
Persistent inflation has revived expectations that the Federal Reserve may raise interest rates again. ANZ analysts said signs of economic resilience could prompt the Fed to consider a half-point increase in December, though that remains a risk scenario. Traders were pricing about an 89% chance of a quarter-point hike and an 11% chance of a larger move.
Chicago Fed President Austan Goolsbee called the inflation report troubling, particularly because services inflation had yet to ease convincingly. Higher Treasury yields and a stronger dollar reduce the appeal of non-yielding assets such as gold, and similar macro pressures can weigh on broader risk assets, including cryptocurrencies, by tightening financial conditions.
FXStreet identified $3,930 as a key technical retracement level for gold, with $3,870 possible on a sustained break. A recovery above $4,009 would signal that selling pressure is easing. Attention now turns to Friday's US Producer Price Index report and the Fed's 8–9 December meeting.
OCBC strategists maintained a constructive medium-term outlook for gold, citing central-bank buying and investment demand as potential support once the interest-rate environment improves. Still, near-term sentiment across macro-sensitive markets remains cautious.
