Gold Drops to $4,145 Following Hot US Inflation at 3.7%

Spot gold fell to $4,145 per ounce and silver to $58.56 after US consumer price inflation came in at 3.7% in September, higher than expected, according to the daily spot precious metals markets report released by "USA Gold" on October 14.

The decline is attributed to the strength of the dollar following the hot inflation reading, as rising inflation prompts traders to expect monetary tightening for a longer period, raising bond yields, bolstering the US currency, and increasing pressure on non-yielding gold.

This comes after silver lost the $59 level to settle near $58.56, while gold remained close to its session lows, according to the same report tracking spot delivery levels and the macroeconomic factor behind the move.

Investors are monitoring the Federal Reserve's monetary policy path over the coming months, as observers believe that persistently high inflation may encourage the central bank to keep interest rates high, a factor pressing gold, which nevertheless remains a preferred safe haven for Arab investors.

What Do These Terms Mean?

Consumer Price Index (CPI): An official measure of the change in prices of goods and services purchased by consumers, used to measure inflation.

Precious Metals: Rare, high-value metals such as gold, silver, and platinum, used for investment, savings, and industry.

Silver: A precious metal traded alongside gold, with industrial applications that make its prices more volatile.

Interest Rate Hike: An increase by the central bank in the benchmark interest rate, raising borrowing costs, supporting the currency, and putting pressure on gold.