Eco
Gold prices declined in early Asian trading on Friday following a drop of more than one percent in the previous session, driven by rising expectations of a US interest rate hike amid persistent inflation pressures, negatively impacting the precious metal's appeal. Spot gold fell 0.4% to $4006.06 per ounce, while December futures dropped 0.3% to $4018.50. Despite modest weekly gains, gold is on track for a second consecutive month of losses. US inflation accelerated in September due to increased gasoline and consumer goods prices, supporting economists' forecasts for a rate hike in December. The FedWatch tool by CME indicates roughly a 75% probability of a rate increase in December. Higher interest rates raise the opportunity cost of holding non-yielding gold, reducing its attractiveness to investors. In Europe, the European Central Bank kept rates unchanged recently but signaled a likely increase in December, warning of rising inflation risks from elevated energy costs, and announced the ECB president will step down in February. In Japan, October data showed Tokyo's annual core inflation far exceeded the central bank's 2% target, highlighting mounting price pressures and strengthening the case for monetary tightening. Other precious metals saw silver drop 1% to $51.87 per ounce in spot trading, platinum steady at $1488, and palladium down 0.5% to $1000.75, with all three metals heading for weekly and monthly losses.
