The decline started with the October CPI report, when gold fell from about $4,080 to $4,046.40 within a minute, and it continued as the USD Index soared to 102.36 and the 10-year Treasury yield rose to about 5 percent.
In my gold price forecast for November 2026, I wrote: “With the first target reached, the next one is about $3,500.” Yesterday, I wrote what a hot CPI reading would mean for gold: “A hot reading would add to the case for a December hike, and to the pressure on gold.” Today’s reading was hot, and gold reacted right away.
Core prices, which exclude food and energy, rose 0.3 percent in October, compared with the 0.2 percent that economists polled by Reuters expected, according to the BLS. It was the third 0.3 percent increase in a row. Overall consumer prices rose 0.4 percent, compared with expectations of 0.3 percent, after 0.6 percent in September.
The BLS didn’t publish the annual rate this time, because last year’s government shutdown prevented the collection of price data in October 2025. Food prices rose 0.5 percent and energy prices 0.7 percent, so the slowdown in the headline rate was smaller than expected.
For gold, the core reading matters more than the headline number, and Monday showed why.
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See all Gold forecastsWhy Cheaper Oil Didn’t Help Gold
On Monday, Brent fell 5.85 percent, to $92.57, its lowest level since August 31, after President Trump said that “Iran militarily is effectively over.” Lower oil eases the inflation outlook, but the odds of a December rate hike rose anyway. Based on the CME FedWatch tool, they were about 81 percent on Monday morning and about 84 percent this morning, according to Reuters.
The reason lies in what the Fed watches. Energy prices swing a lot, so Fed officials focus on core prices and on wages, because these two show where inflation is likely to go next. Friday’s jobs report showed that average hourly earnings rose 0.4 percent in October, and the 2-year Treasury yield, which moves with the expected path of the Fed’s rates, rose about 4 basis points on Monday, even as oil slid.
Today’s core reading added to this picture, and so did Fed Governor Waller, who said earlier today: “Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take.” Based on the CME FedWatch tool, the odds of a December hike are now close to 100 percent. Higher expected interest rates make gold, which pays no interest, less attractive, and they support the dollar.
The Dollar Bounces Off Its Support
Early today, the USD Index futures fell to 101.38, right at their previous yearly highs, and then they reversed. After the CPI report, the USD Index soared to 102.36, right at Friday’s high.
These highs used to be resistance, and now they work as support. The USD Index futures have closed above them every day since October 1, and today’s bounce verified this support once again. In my view, this points to another move up in the USD Index, which would be bearish for gold.
Gold’s own price action points in the same direction.
Gold’s Rebound Fades
On Monday, December gold futures rallied to $4,157.70, only $1.90 above Thursday’s high, and they reversed overnight, before the CPI report sped up the decline. Today, they fell to $4,033, slightly below Friday’s low of $4,035.10.
Since the August top, gold has been declining in a steady, back-and-forth manner, and in my view, the price pattern remains in tune with what we saw in 2013, right before the biggest part of that year’s slide. The current rebound seems to be the final one, similar to the rebound of February and March 2013, which came right before gold’s April 2013 crash.
Silver followed gold lower. Early today, it was stronger than gold, but after the release, December silver futures slid as low as $51.28. In my silver price forecast for November 2026, I explained why silver’s strength in a rebound usually points to a corrective upswing, not to a new rally.
Where This Leaves Us
The core CPI came in hot, the USD Index soared from its support to Friday’s high, and gold slid below Friday’s low. The moves were big enough that I sent an intraday Alert to my Gold Trading Alerts subscribers today. Monday’s slide in oil didn’t lower the odds of a December hike, today’s report added to them, and in my view, the next big move in gold is still down, toward about $3,500.
Cheaper oil gave gold one good day. The core CPI took it back.
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Thank you.
Sincerely,
Przemysław K. Radomski, CFA