Hot CPI, hawkish Fed: why gold lost $100 in a day

Tuesday’s inflation report landed on the hot side, and gold gave back much of its post-election rally in an afternoon. Spot gold was near $4,031.80 an ounce in late US trading, down $107.60 or 2.60%, Kitco reports. Silver fell harder, down 3.55% to about $51.41. CNBC reports gold fell nearly 3% to $4,017.21 on Tuesday.

What the October CPI showed

October CPI, month on month	Actual	Expected	Note
Headline	+0.4%	+0.3%	September was +0.6%
Core (ex food and energy)	+0.3%	+0.2%	Same monthly rise as August and September
Energy	+0.7%		After a 5.2% jump in September; gasoline +1.0%
Food	+0.5%		Groceries +0.4%
Shelter	+0.3%

As reported by Kitco. The Bureau of Labor Statistics did not publish most annual rates for October because of the October 2025 government shutdown, so there is no clean year-on-year figure.

The core number is the one that mattered. A third straight 0.3% monthly rise in core prices is roughly a 3.7% annualised pace by our arithmetic, well above the Fed’s 2% goal. Energy is no longer doing most of the work, which was the case with September’s print (see last month’s hot CPI).

Why higher rates hurt gold even when inflation is high

It sounds backwards: gold is meant to protect against inflation, and inflation just came in hot. But gold pays no interest, so what matters day to day is what an investor gives up to hold it. Kitco reports the 10-year Treasury yield briefly moved above 5.00% and the 2-year approached 4.75%, up about 18 basis points, while the dollar strengthened. When safe bonds pay that much, and a stronger dollar makes bullion dearer for overseas buyers, the cost of holding gold goes up. Matt Simpson of StoneX told CNBC: “Hot CPI and hawkish Fed comments have revived tightening expectations.”

25 or 50 basis points?

The question has moved from whether the Fed raises rates at its 8–9 December meeting to how far. CNBC, citing CME’s FedWatch tool, says traders now see a 100% probability of a December increase, up from 84% before the data. Kitco’s reading of futures pricing put 88.2% on a quarter-point move and 11.8% on a half-point one. The Fed held its target at 3.75%–4.00% in October, with two policymakers favouring an immediate rise.

Fed Governor Christopher Waller had said the Fed should raise rates in December even if inflation moderated, and that a larger increase could be appropriate if underlying pressures stayed elevated, Kitco reports, adding that October’s core figure met the threshold he had set for considering a 50 basis point move. CNBC reports that Philadelphia Fed President Anna Paulson said the Fed has more rate increases ahead, and that Vice Chair for Supervision Michelle Bowman stressed that bringing down inflation remains the top priority. Richmond Fed President Tom Barkin was more cautious on Monday, emphasising the need to assess incoming information. How the market got here is in Rate hikes, not cuts.

Wednesday: a bounce, capped

Gold edged back up overnight. CNBC had spot gold 0.3% higher at $4,043.62 by 03:03 GMT on Wednesday and silver up 1.7% at $52.38. Simpson called it “a technical retracement against Tuesday’s heavy losses.” ANZ’s Soni Kumari said “the near-term macro setup for gold does not seem positive.” US Treasury markets are closed on Wednesday for Veterans Day.

The levels analysts name

Kitco’s support and resistance levels and targets for gold, to scale around its late-Tuesday spot price of $4,031.80.

These are their reference points, not ours. Kitco names resistance at $4,051.45 and $4,088.51, upside targets at $4,147.62 and $4,200.09, support at $4,020 and $4,000, and downside targets at $3,910 and $3,890. FXEmpire treats $4,000 as triangle support, says a break below it could push gold towards $3,800, and puts resistance at $4,150, with the 50-day moving average at $4,178.

Next: producer prices on Friday

October’s producer price index is due on Friday at 8:30 a.m. New York time. FXEmpire says a stronger reading may push the dollar higher. After CPI, it is the next data point before the December meeting. Our CPI-day preview set out what a hot reading would test; this was that case.

The views above are those of the publications and people named. This site does not forecast prices or Fed decisions, and nothing here is advice. The current figure is on the gold price page.

Every figure here is as reported by the publications listed under Sources, at the time they reported it. Prices move; the live gold price has the current one. Nothing on this page is investment advice.