Gold bounces near 4,055 after hot US CPI triggers 3% drop

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Gold bounces near 4,055 after hot US CPI triggers 3% drop

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Gold

Gold is bouncing on Wednesday after falling about 3% on Tuesday, when hotter-than-expected US inflation data lifted the dollar and yields. Markets now price about a 91% chance of a December Fed hike, which limits further gains.

Gold traded around 4,055 on Wednesday, a rebound within an Asian range of 4,027 to 4,066. The move follows a drop of about 3% on Tuesday after the US CPI print came in hotter than expected.

Rate-hike pricing caps the upside

Gold fell on Tuesday when the hotter-than-expected CPI lifted the dollar and yields. Separately, markets now price about a 91% chance of a December Fed hike, which caps the upside.

Event risk through the European session

The US observes Veterans Day and France has a bank holiday, so USD liquidity may be thinner. Volatility can spike around scheduled events, and the calendar lists ECB President Lagarde speaking at 10:45 Prague time, an event flagged for both EURUSD and XAUUSD.

Source: MQL5: Traders' Blogs

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