Dollar Hits 19-Month High as Gold Falls Below $4,000
Key Facts
The dollar index rose to a 19-month high against major currencies in Thursday’s November 12 session, while spot gold fell below $4,000 an ounce, a move Reuters attributed to U.S. inflation data and comments from Federal Reserve officials. The dollar index, which measures the U.S. currency against a basket of currencies, gained 0.15% to 103.02 points, its highest level since April 2025. By contrast, spot gold fell 0.2% to $3,977.99 an ounce by 0506 GMT. The metal had earlier touched its lowest level since November 4. The report said stronger-than-expected inflation and hawkish comments lifted the dollar and expectations for a rate hike the following month.
The moves followed a 0.4% seasonally adjusted monthly rise in the U.S. consumer price index in October, compared with a 0.6% increase in September, according to the Bureau of Labor Statistics. Although the monthly rate slowed between the two months, Reuters said October’s data came in stronger than expected. The food index rose 0.5% in October, while the energy index increased 0.7% after a 5.2% jump in September. The figures set the backdrop for shifting monetary policy expectations, as price data and comments from Fed officials strengthened market bets on tighter policy. That translates into pressure on dollar-denominated gold, as a stronger U.S. currency makes an ounce more expensive for holders of other currencies.
The dollar’s rise extended beyond its index against a basket of currencies; it gained 0.04% to 159.83 yen after earlier reaching its highest level in more than two months during the session, according to Reuters. The report said the dollar reversed an earlier decline during the session before trading higher against the Japanese currency. In the gold market, Ilya Spivak, head of global macro at Tastylive, described the move as a notable pullback in recent days following U.S. inflation data and rising rate hike expectations. He added that the market was “struggling to sustain the move.” His comment reflects the effect of rate repricing on the non-yielding metal, alongside a stronger dollar.
Reuters said traders increased their bets on tighter monetary policy after October inflation and comments from Federal Reserve officials, who voiced concern that inflation remained persistent and did not rule out a larger 50-basis-point rate increase. The report also noted that some major brokerages, including Goldman Sachs, expect another increase early next year in addition to one in December. These remain forecasts attributed to brokerages and market pricing, not an announced Fed decision. Against the backdrop of inflation concerns, Federal Reserve Governor Christopher Waller said the personal consumption expenditures index rose 0.5% in September and 3.7% over the previous twelve months. The core index rose 0.3% month over month and 3.1% year over year, and Waller described inflation as “too high.”
Attention now turns to the U.S. October producer price index, scheduled for release on Friday, November 13, according to the Bureau of Labor Statistics calendar. The upcoming reading will provide another gauge of price pressures after consumer data that helped strengthen expectations for tighter monetary policy. The next Federal Open Market Committee meeting is scheduled for December 8 and 9, 2026, according to the Federal Reserve calendar. Reuters previously linked gold’s decline to expectations of a rate hike the following month, while some brokerages pointed to the possibility of another increase early next year. Those bets will remain market expectations until the Fed announces its decision.