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Gold prices fell to a near two-month low on Thursday, primarily due to a stronger dollar following U.S. inflation data, while expectations for further Federal Reserve guidance also dampened the market.

Industrial Metals

Among industrial metals, copper prices plummeted to a three-month low as concerns regarding China, the top importer, continued to affect market sentiment. Recent stimulus measures from China failed to meet expectations, and fears of higher U.S. trade tariffs under a potential second Trump presidency added to the pressure.

However, the dollar's strength remained a significant factor in the slump of metal markets, reaching a one-year peak amid uncertainties about future interest rates.

• Spot gold fell 0.5% to $2,560.74 an ounce.
• Gold futures for December declined 0.8% to $2,565.25 an ounce.
• Spot gold has seen an over 8% decrease from its record high in October.

Gold Pressured by Dollar Spike on Sticky CPI Data

The losses in gold were linked to a sudden spike in the dollar and Treasury yields this week. The rally of the dollar was fueled by consumer price index inflation data published on Wednesday, which illustrated persistent inflation in October.

Despite traders increasing bets on a rate cut from the Fed in December, uncertainties regarding long-term rates lingered. The market also anticipates a possible increase in inflation due to expansionary policies from a Trump administration, likely keeping long-term rates elevated.

This week, attention was directed at an upcoming address by Fed Chair Jerome Powell, who reaffirmed the bank's data-driven approach to future easing after last week's 25 basis points cut.

• Other precious metals also declined:
  • Platinum futures fell 0.4% to $938.15 an ounce.
  • Silver futures dropped 1.4% to $30.233 an ounce.

Copper Slides to Three-Month Low on China Woes

On the industrial metals side, copper prices continued their downward trend, reaching a three-month low influenced by negative sentiment surrounding China.

• Benchmark copper futures on the London Metal Exchange fell 0.9% to $8,940.50 a ton.
• December copper futures dropped 0.8% to $4.3060 a pound, marking their lowest points since August.

China's recent fiscal measures did not satisfy traders, who were hoping for more targeted support for private spending and the property market. Additionally, anticipated higher trade tariffs under Trump further complicated China’s outlook.

More stimulus measures from Beijing are expected to be outlined during two key political meetings scheduled for December.

Key Focus: Industrial production and retail sales data from China, due on Friday, might provide further insights into the economy.