Market Overview

On Tuesday, spot gold dropped 2.7% to $4,030.33 per ounce and gold futures fell 1.9% to $4,037.95 per ounce at 15:40 ET (20:40 GMT). The decline coincided with a 0.6% rise in the U.S. dollar index to 102.25, reflecting a stronger greenback against its six‑major‑currency basket.

U.S. Inflation Data

The U.S. Bureau of Labor Statistics released the October consumer price index (CPI). Headline CPI increased 0.4% month‑on‑month, outpacing the 0.3% consensus estimate. Core CPI, which excludes food and energy, remained unchanged at 0.3% month‑on‑month, also above the expected 0.2%. No year‑over‑year figures were published because of the October 2025 U.S. government shutdown.

Federal Reserve Commentary and Rate‑Hike Odds

Prior to the CPI release, Fed Governor Christopher Waller delivered a hawkish speech in London, stating he supported further rate hikes even if inflation cooled and that a half‑point (50 bps) increase could be warranted if data came in hot. The combination of the hotter‑than‑expected CPI and Waller’s remarks pushed the CME FedWatch tool’s probability of a 50‑basis‑point hike in December to nearly 10%.

Analyst Insight

Danni Hewson, head of financial analysis at AJ Bell, noted that energy price rises had slowed in October, but the high cost of gas was already filtering through the economy. She added that the lack of a full data set and year‑over‑year comparison still indicated “second‑round effects” and that core inflation remained above the level some Fed members consider comfortable, reinforcing the prospect of a half‑percentage‑point hike in December.

Gold‑Oil Relationship and Oil Market Moves

Gold’s losses were partially offset by a decline in oil prices. Brent crude futures fell below $90 per barrel, reaching a session low of $89.18, the first sub‑$90 level since 31 August. The benchmark later traded at $92.02, down 0.6%. The oil dip followed optimistic comments from President Donald Trump, who said the Iran war was “effectively over” and that a naval blockade would largely remain in place. Trump made these remarks after meeting Qatar Prime Minister Sheikh Mohammed bin Abdulrahman Al‑Thani to discuss a potential Iran deal. Additionally, Iran‑backed Houthis claimed attacks on Saudi Arabian energy infrastructure, including several pumping stations on the kingdom’s East‑West pipeline.

Recent Context

Spot gold had already slipped about 5% in the prior week as oil prices slumped amid expectations of a breakthrough in U.S.–Iran peace negotiations following the U.S. mid‑term elections, where Democrats secured control of Congress.

Publication Details

The article, titled “Gold prices drop after hot CPI, hawkish Waller spark supersized Fed hike bets,” was authored by Anuron Mitra and contributed to by Roushni Nair and Scott Kanowsky. It was published on 10‑Nov‑2026 at 10:40 am and updated on 11‑Nov‑2026 at 02:16 am by Reuters. A promotional note for InvestingPro was also included.