Gold futures on the New York Mercantile Exchange fell on December 12, with the most actively traded contract for December 2026 delivery dropping 0.48% to settle at $4,195.90 per ounce.
Persistent inflation pressure, elevated bond yields, and a dollar hovering near an 18-month high have made it difficult for the gold market to sustain its recent recovery momentum.
Investors are reluctant to build large positions ahead of the U.S. Consumer Price Index (CPI) report due on the 14th, and gold's upward momentum has faded.
The dollar remains a major headwind for precious metals prices. Escalating conflict in the Middle East has driven the dollar stronger, pushed energy prices higher, and increased the likelihood of rising global interest rates.
The U.S. bond market poses another significant challenge for gold, with the benchmark 10-year Treasury yield still well above 5%, close to its highest level in nearly 20 years.
U.S. crude benchmark West Texas Intermediate (WTI) rose more than 2% to $93.69 per barrel, spurred by Houthi attacks on Saudi Arabia, Iranian strikes on vessels in the Strait of Hormuz, and ongoing clashes between Russia and Ukraine. With negotiations to reopen the Strait of Hormuz failing to reach a lasting solution, the U.S.-Iran conflict remains a significant source of uncertainty.
The World Gold Council noted in its latest monthly ETF report that 67.3 tonnes of gold flowed into global ETFs in September, worth nearly $10 billion. Third-quarter gold inflows reached a record $31 billion, with demand strongest among Europe- and North America-listed funds. The report indicated that while physical gold demand in major global markets remains weak, investment demand for gold ETFs remains strong.
Bank of America commodity analysts said in their latest precious metals report that despite stable investment demand, they expect gold prices will be unable to sustain levels above $4,000 per ounce over the next three months. Analysts believe the $4,155 to $4,177 per ounce range will be an important support zone.
The U.S. September Consumer Price Index (CPI) will be released on the 14th, and the Producer Price Index (PPI) on the 15th.
Silver futures for December delivery fell 0.78% on the day to settle at $60.57 per ounce.