Gold is a non-yielding asset. It pays no interest, so its appeal falls when interest rates rise.
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Spot gold fell to about $3,959 an ounce on 12 November 2026, its lowest level since 4 November.
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Hot US inflation data raised the market’s expectation of a Fed rate hike in December.
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The US dollar rose to a 19-month high, which made gold more expensive for non-US buyers.
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In India, 24K gold fell for a third straight session to ₹13,980 per gram.
What Happened to The Gold Price?
Spot gold fell 0.7% to $3,959.03 an ounce by 07:32 GMT (13:02 IST) on 12 November. December gold futures fell 0.9% to $3,964.50.
This decline continues a larger trend. Gold traded above $5,000 an ounce in February 2026. Today’s price is about 20% below that level.
Why Do Rate Hike Expectations Push Gold Down?
The mechanism has five steps:
- US inflation for October rose more than expected.
- Fed officials said that they are ready to tighten policy more aggressively.
- Higher expected rates push up the yield on bonds and deposits.
- Gold pays no yield, so the cost of holding gold rises.
- Some investors sell gold and buy assets that pay interest.
The data supports each step:
Markets now price a rate hike in December and another in March. The odds of a December hike reached 87%, and US Treasury yields reached 5%. The odds of a larger, half-point hike also rose.
Not every Fed official agrees on the speed. Philadelphia Fed President Anna Paulson and Dallas Fed President Lorie Logan sounded hawkish.
Governor Michelle Bowman and Kansas City Fed President Jeffrey Schmid were more cautious. However, all four said that inflation is high.
To see how Fed decisions affect other assets, read our guide on US Fed rates and their market impact.
Why Does a Strong Dollar Matter?
The world prices gold in US dollars. When the dollar rises, a buyer who uses another currency must pay more for the same ounce. As a result, demand from outside the US can fall.
The US Dollar Index, which compares the dollar with six major currencies, traded near 103. This is a 19-month high.
How Does This Affect Gold Prices in India?
The Indian price depends on two inputs: the dollar price of gold and the USD/INR exchange rate. On 12 November, 24K gold fell ₹218 to ₹13,980 per gram. This was the third straight daily decline. Gold is now 2.63% below its Diwali level. In Mumbai, silver traded at ₹2,00,000 per kg.
For a wider view, read why gold outperformed bitcoin earlier this year.
XAU, PAXG and XAUT: What is the Difference?
All three assets follow the gold price. However, they carry different risks.
| Asset | What it tracks | Additional risk |
| XAU | Spot gold price | No issuer risk; leverage risk on futures |
| PAXG | Token backed by gold held by Paxos | Issuer and attestation risk |
| XAUT | Token backed by gold held by Tether | Issuer, attestation and redemption-term risk |
Today, the same macro drivers move all three. Issuer news, such as a reserve report, affects only PAXG or XAUT.
What Could Change the Trend?
The next US data point is the Producer Price Index (PPI), due on Friday, 13 November. A second hot reading can add pressure on gold. A cool reading can reduce rate hike expectations.
Analysts at OCBC see near-term risks as two-way. They say that oil prices, yields and the dollar remain the main drivers. They are not bearish on gold’s medium-term outlook. Middle East tension can also bring safe-haven demand back to gold.
Use WazirX Gold Futures to track International Gold price in India. Download the WazirX app and start trading.
Frequently Asked Questions
US inflation data raised expectations of a Fed rate hike. Higher rates and a strong dollar reduce demand for gold.
On 12 November 2026, 24K gold was ₹13,980 per gram and 22K gold was ₹12,815 per gram.
No. Gold also responds to geopolitics and central-bank buying. These factors can offset the effect of rates.
No. PAXG is a token backed by gold that Paxos holds. It follows the gold price but also carries issuer risk.
The US PPI report on Friday, 13 November, is the next key data point.
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