Gold paused its four-day decline as a strong dollar rally continued to pressure the metal, despite U.S. inflation data bolstering expectations for another Federal Reserve rate cut next month.

Gold held steady following a 1% drop in the prior session, which had driven it to an eight-week low. A U.S. dollar index has climbed to a two-year high amid optimism that President-elect Donald Trump’s victory will spur economic growth and corporate earnings. The stronger dollar generally makes dollar-priced commodities more costly for international buyers.

U.S. consumer price data released Wednesday met headline expectations, while the annualized three-month core rate increased. This data supports a likely Fed rate cut in mid-December, with swaps traders now seeing an over 80% probability. Lower interest rates typically favor gold, which doesn’t generate interest.

Gold has dropped over 7% from its record high on October 31, with losses accelerating after Trump’s win. Nevertheless, prices remain up about 25% this year, driven by the Fed’s monetary easing, central bank purchases, and heightened geopolitical and economic uncertainties that have boosted safe-haven demand.

As of 8:25 a.m. in Singapore, spot gold remained stable at $2,574.55 an ounce. The Bloomberg Dollar Spot Index held steady after reaching its highest level since 2022 on Wednesday. Silver inched up, palladium remained flat, and platinum slipped slightly.

Paraphrasing text from "Bloomberg" all rights reserved by the original author.