Gold Price Falls Nearly 3% as US CPI Beats Forecasts, Stronger Dollar and Treasury Yields Pressure Bullion
New York, November 11, 2026: Gold prices plunged nearly 3% on Tuesday after stronger-than-expected US inflation data boosted the US dollar and Treasury yields, increasing expectations that the Federal Reserve could adopt a more aggressive interest rate policy.
Spot gold declined 2.7% to $4,028.39 per ounce by 1:53 p.m. ET, while US gold futures for December delivery settled 2% lower at $4,030.20 per ounce. The sharp decline reflected growing concerns among investors that persistent inflation could delay monetary easing and potentially lead to higher borrowing costs.
US Inflation Data Triggers Gold Sell-Off
According to the US Labor Department’s Bureau of Labor Statistics, the Consumer Price Index (CPI) increased 0.4% in October, exceeding economists’ expectations of a 0.3% rise.
Although the monthly inflation rate slowed from September’s 0.6% increase, the latest reading remained above market forecasts. Core inflation also came in higher than expected, adding to concerns about persistent price pressures in the US economy.
The hotter-than-expected inflation figures prompted investors to reassess their expectations for the Federal Reserve’s upcoming monetary policy decisions.
Stronger US Dollar and Treasury Yields Weigh on Gold
The US dollar strengthened against a basket of major currencies following the inflation report, while US Treasury yields also moved higher.
These developments created additional pressure on gold prices for two major reasons.
First, gold is internationally priced in US dollars. A stronger dollar makes the precious metal more expensive for investors using other currencies, potentially reducing international demand.
Second, gold does not generate interest income. When Treasury yields rise, interest-bearing investments become relatively more attractive, increasing the opportunity cost of holding bullion.
The combination of a stronger dollar and higher bond yields therefore triggered selling pressure across the precious metals market.
Fed Rate Hike Expectations Increase
The latest inflation figures have strengthened expectations that the Federal Reserve may maintain a restrictive monetary policy.
Markets had already priced in a 25-basis-point interest rate increase for December. However, following the CPI announcement and comments from Federal Reserve Governor Christopher Waller, expectations of a larger 50-basis-point increase began to emerge.
According to the CME FedWatch Tool, the probability of a 50-basis-point rate increase rose to approximately 10%, compared with zero before the inflation data.
Market participants are now closely monitoring upcoming economic indicators and Federal Reserve communications to assess the direction of US monetary policy.
Silver, Platinum and Palladium Also Decline
The weakness in gold extended across the broader precious metals market.
Spot silver declined 3.95% to $51.30 per ounce, while platinum dropped 2.7% to $1,534.38 per ounce. Palladium also slipped 1.2% to $1,028.83 per ounce.
The broad-based decline highlighted how changing interest rate expectations and movements in the US dollar can influence precious metals markets.
Gold Remains Above the $4,000 Level
Despite the sharp sell-off, gold continued to trade above the psychologically important $4,000-per-ounce level.
Investors are now watching the Federal Reserve’s December policy meeting, future US inflation readings and movements in Treasury yields for clues about gold’s next direction.
While higher interest rates and a stronger dollar could continue to weigh on bullion in the short term, central bank purchases, geopolitical uncertainty and safe-haven demand remain important factors supporting the longer-term gold market.
The coming weeks could prove crucial in determining whether gold stabilises above $4,000 or faces further selling pressure.