Gold Prices Plunge as Fed Rate Hike Fears Intensify Moz Farooque ACCA Thu, November 12, 2026 at 2:44 PM EST 2 min read GC=F -3.05% DX-Y.NYB +0.27% CL=F +2.77% GLD -2.83% Trade GLD on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Gold prices plunged 3% Thursday to their lowest level in more than a year as a surging U.S. dollar and growing expectations of additional Federal Reserve interest-rate hikes battered precious metals. The selloff challenges gold's traditional reputation as an inflation hedge, with investors increasingly worried that persistent price pressures will force borrowing costs higher for longer.
Warning! GuruFocus has detected 4 Warning Signs with QBTS.
Is GLD fairly valued? Test your thesis with our free DCF calculator.
Spot gold fell 3% to $3,867.96 per ounce by 10:01 a.m. ET, touching its lowest level since October 2025.
U.S. gold futures for December delivery declined 3.2% to $3,872, extending bullion's losses for a third consecutive session.
The pressure intensified after President Donald Trump suggested Washington no longer needed an agreement with Iran, weakening hopes for an end to the Middle East conflict.
Oil prices subsequently climbed more than 1%, reigniting concerns that higher energy costs could keep American inflation elevated.
That creates an uncomfortable situation for gold investors.
Although bullion traditionally benefits from inflation uncertainty, higher interest rates increase the opportunity cost of holding an asset that pays no interest.
Meanwhile, the U.S. dollar climbed toward a 19-month high, making dollar-denominated gold more expensive for international buyers.
Tuesday's hotter-than-expected consumer inflation report added to the pressure, strengthening expectations that the Fed will tighten monetary policy further.
According to CME FedWatch data cited by Reuters, markets assigned a 91% probability to a 25-basis-point rate increase in December, with expectations for a larger half-point move also rising.
The weakness extended across precious metals, with silver falling 3.33% to $49.97 per ounce.
Friday's U.S. producer price index report represents the next major catalyst for bullion prices.
Investors should monitor Treasury yields, dollar strength and expectations surrounding the Fed's December meeting.
Another upside inflation surprise could reinforce rate-hike expectations and extend gold's decline.
Conversely, softer inflation data or falling bond yields could ease pressure on precious metals.
Gold-backed ETFs, mining stocks and silver could also remain vulnerable to further volatility.
The key question is whether inflation fears continue strengthening the dollar and interest rates, overwhelming gold's appeal as a defensive asset.
