Sharp drop in gold prices following US inflation data

The Consumer Price Index (CPI) in the US for September increasing by 3.7 percent annually, above forecasts, led to a loss in value exceeding 1 percent in gold prices.

Following the release of US inflation data, the spot price of gold per ounce dropped down to the $4,116 level. In the domestic market, gram gold finds buyers at the 6,533 TL level. Although September CPI data met expectations with a 0.6 percent increase on a monthly basis, the rise in annual inflation triggered selling pressure in the markets.

Markets are now awaiting the Producer Price Index (PPI) and retail sales data for clues regarding the Fed's interest rate policy. In futures markets, the probability of the Fed holding interest rates steady this month is priced at 77 percent, while the probability of a rate hike in December is priced at 88 percent. New York Fed President John Williams stated that another rate hike might be needed during the year, but additional tightening might not be necessary afterward.

In addition to economic data, geopolitical risks are also being monitored in the gold market. While tensions in the Middle East keep safe-haven demand alive, the IMF listed artificial intelligence investments, debt burdens, and regional conflicts as risk factors for global financial stability.