The Greenback Flexes its Muscle

Precious metals are taking a serious beating as the US currency aggressively flexes its muscle. Gold prices fell slightly today, heavily suppressed by a surging US dollar that just hit levels close to a one-month high against major global currencies. The price of gold in spot trading dropped 0.2 percent to $3,979.09 an ounce, while US gold futures for December delivery fell 0.4 percent to $3,984.50. A strong dollar instantly makes gold far too expensive for international buyers holding weaker currencies.

Fed Readies Interest Rate Hikes

The market is reacting violently to the latest US economic data. American inflation accelerated far more than Wall Street expected during October. Consequently, Federal Reserve officials are broadcasting highly aggressive signals that they are prepared to drastically tighten monetary policy. Financial markets are now rapidly pricing in a massive half-percentage-point increase in US interest rates next month. Other precious metals also suffered, with spot silver falling 0.6 percent to $51.40.