Gold retreats from one-week high as dollar approaches 18-month peak

Spot gold fell 0.4% to $4,176.86 per ounce after touching a one-week high, while US December futures slipped 0.4% to $4,200.90, amid market anticipation of US inflation data and interest rate hike prospects, according to pricing carried out by Reuters via the ZAWYA website on the morning of October 12.

Pressure on the yellow metal comes as the dollar index approaches an 18-month high, with the Kitco morning report pointing to gold slipping towards $4,156.20, a decline of nearly 1%, while the 10-year US Treasury yield remained above 5%.

Derivatives markets price in an 18% probability of a rate hike this month and 85% by December, according to the CME FedWatch tool, while attention focuses on US consumer and producer price data and retail sales.

Silver fell 0.3% to $60.6219 per ounce and platinum dropped 0.2% to $1,684.71, while palladium rose 0.1% to $1,149.20.

What do these terms mean?

Spot Gold: The price paid for gold upon immediate delivery in metals markets, serving as the primary benchmark for pricing the metal globally.

Dollar Index: An index measuring the value of the US dollar against a basket of major currencies; its rise increases the cost of buying gold in non-dollar currencies and puts downward pressure on its price.

Treasury Yield: The interest earned by the holder of a US government bond; higher yields increase the attractiveness of bonds compared to non-yielding gold.

CME FedWatch Tool: A tool by the Chicago Mercantile Exchange showing traders' expectations for the probabilities of US interest rate changes at each meeting.