Gold is crashing again today, falling around 1.6% toward $4,070 as traders react to a more hawkish Federal Reserve and hotter-than-expected U.S. inflation data.
Spot gold dropped from above $4,140 toward the low-$4,070 area, erasing much of its recent rebound. The immediate trigger is a renewed jump in expectations that the Fed will raise interest rates again in December.
Higher rates generally hurt gold because the metal does not pay interest, making Treasury securities and cash more attractive by comparison.
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Fed Rate-Hike Expectations Hit Gold
Federal Reserve Governor Christopher Waller said he supports at least a 25-basis-point rate increase at the December meeting, even if inflation cools.
He also said policymakers should consider a larger 50-basis-point hike if core inflation remains strong. His comments pushed Treasury yields higher and kept the dollar supported.
Before the latest inflation report, markets were already pricing an extremely high probability of another December increase.
That made gold vulnerable heading into the CPI release.
The pressure then intensified after October consumer prices came in hotter than expected, reinforcing expectations that the Fed will remain restrictive.
Gold is down as the Fed signals more rate hikes ahead of US inflation data. But higher rates undermine the US government’s ability to refinance its massive debt pile… If higher rates truly make USTs more attractive than gold, then why are global central banks dumping USTs and buying gold instead? They know that we don’t own nearly enough gold for what’s coming.
— Lukas Ekwueme (@ekwufinance) November 10, 2026
This is almost the opposite of what helped gold rally yesterday, when lower oil prices reduced inflation fears and briefly eased pressure on interest-rate expectations.
Why Higher Yields Are Bad for Gold in the Short Term
Gold competes with interest-bearing assets.
When Treasury yields rise, investors can receive a higher return from government debt without taking significant credit risk.
Gold offers no yield.
That does not destroy the long-term bullish case, but it can create strong short-term selling whenever markets suddenly expect tighter monetary policy.
The current move illustrates that clearly.
Gold has fallen from around $4,140 toward $4,070 as rate expectations shifted higher, with short-term Treasury yields moving up at the same time.
If $4,070-$4,050 fails, the next important area comes around $4,000.
A recovery above roughly $4,100-$4,120 would be the first sign that today’s selling is losing momentum.
Read also: Gold Price Today: China Buys 25.8 Tonnes as Gold Rebounds From October Crash
But Central Banks Are Still Buying Gold
Lukas Ekwueme offered a different perspective on the selloff.
He argues that higher rates may make U.S. Treasuries more attractive in the short term, but they also increase the government’s refinancing burden as existing debt matures.
He then points to continued central-bank gold accumulation as evidence that official institutions are still looking for alternatives and diversification.
There is real data behind part of that argument.
Central banks reported 61 tonnes of net gold purchases in September, the strongest monthly total of 2026 so far. Poland and China were among the largest buyers.
The World Gold Council also found that 89% of surveyed reserve managers expect global central-bank gold holdings to increase over the next 12 months, while 45% expect their own institutions to add more gold.
That does not mean central banks are universally “dumping Treasuries,” however. Reserve allocation decisions vary widely, and gold purchases do not automatically mean equivalent U.S. Treasury sales.
Short-Term Pain, Long-Term Demand
That distinction explains the unusual situation in gold right now.
Short-term traders are selling because hotter inflation and a more hawkish Fed increase the opportunity cost of holding gold.
At the same time, central banks continue accumulating the metal for diversification, crisis protection and long-term reserve management.
Reuters recently reported that central banks purchased 321.2 tonnes of gold during the third quarter, the strongest quarterly total since late 2024.
So today’s crash does not necessarily invalidate gold’s longer-term story.
For the immediate price action, though, the Fed is in control.
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