Gold drops to $1,870 on rekindled Fed rate concerns

Spot Gold price declines to $1,870 as markets turn around in response to US CPI inflation data. Markets are still undervaluing US inflation, which has caused risk-off flows.

Thursday’s XAU/USD pricing has turned negative after beginning the day near $1,875. After the US Consumer Price Index (CPI) inflation reading revealed that US inflation continues to remain higher than investors are hoping for, sending markets swarming into safe havens, XAU/USD plummeted off the day’s highs towards $1,870.

Inflation in the US CPI remained constant in September at 3.7% vs. the expected 3.6%. Before falling back into Wednesday’s trading range, Spot Gold reached an intraday high of $1,885, a ten-day high for XAU/USD bids.

Investor concerns about the Fed being forced into another rate hike before the end of 2023 are increasing due to rising inflation fears in broader markets. This might cause the Fed’s “dot plot” to move further away from the predicted start of the rate-cutting cycle.

Gold prices remain overall well-bid in the medium term after catching a firm ride up the order sheets as gold prices struggle to lift themselves from 2023’s lows.