Today, gold trades below $4,000 per ounce. Silver is nearly unchanged at about $51.61, while platinum and palladium rose slightly. The metal slipped below $4,000 for the first time since early November, when it had already hit a low.

The reason is that US inflation remains persistent and Federal Reserve officials are taking a hawkish tone. Traders have fully priced a 25-bp hike in December, and some allow for a 50-bp step. After Waller's speech, the odds of a US rate increase rose to 96%. "The October inflation report is worrying, on the verge of alarming," said Chicago Fed president Austan Goolsbee. Recall that a month earlier the Fed left rates at 3.75–4.00% on a 10–2 vote, with two officials voting for a hike.

Rising rates pressure gold through two channels. Two-year Treasury yields, which are particularly sensitive to rate expectations, rose about 25 basis points this week alone, including a 17-bp jump on Tuesday. Gold pays no yield, so higher interest rates make it less attractive, and a stronger US dollar makes the metal more expensive for most buyers.

Central-bank purchases and safe-haven demand still provide support, but they are not strong enough to offset rising rates.

Oil acts in the opposite direction in this chain. Brent fell from $116 on October 30 to roughly $91, and the November 9 oil decline supported gold by reducing inflation risks. However, after October's CPI — which beat forecasts for the third month in a row — the market is again focused on the Fed rather than commodities. As long as the Strait of Hormuz remains a risk, the geopolitical premium will prevent energy prices from collapsing fast, so inflationary pressure will persist.

The next test is Friday's US producer-price index (PPI). Many experts see a risk of gold falling to $3,870, and an unexpected PPI rise could extend the metals' pullback.

All this indicates gold is under pressure while rates and the dollar rise. I believe the metal will remain below $4,000 until the PPI release and risks retesting the early-November low around $3,954. A hot PPI would open the way to $3,849, while a soft report would produce only a rebound; returning above $4,062 in the coming days looks unlikely.

On the technical side, buyers need to take the nearest resistance at $4,001. That would set up a target of $4,062, above which a breakout will be difficult. The most distant target is the $4,140 area. On a decline, bears will try to seize control of $3,954. If they succeed, a range breakout would deal a serious blow to bull positions and push gold toward a $3,906 low with the prospect of moving to $3,849.