Gold Breaks Below $4,000 as Hot Inflation Data Fuels December Fed Rate Hike Bets

Gold tumbled below the $4,000-an-ounce threshold, extending losses after a hotter-than-expected US inflation report and hawkish remarks from Federal Reserve officials intensified expectations for an additional interest rate increase in December. Spot gold fell 0.8% to around $3,985-$4,002 during late US trading Wednesday and into the early Asian session Thursday, with prices holding below that key level as markets reassessed the Fed's policy path.

A stronger US dollar compounded the pressure on bullion, with the greenback climbing to its highest level since May 2025. Gold, which pays no interest, loses relative appeal when rate hike expectations rise and the dollar strengthens, making the metal more expensive for holders of other currencies.

The selloff follows Tuesday's inflation data, which came in above forecasts and effectively forced traders to price in continued Fed tightening. Fed officials reinforced that message with hawkish commentary, leaving markets anticipating a December hike and keeping gold on the defensive heading into the next policy meeting.