Breaking: Gold Drops Over 2% Below $3,900 as Dollar Hits 19-Month High

Spot gold started to weaken early on Thursday, 12 Nov, with Reuters reporting that it touched its lowest level since 4 Nov during the Asian session. Selling then accelerated into the European afternoon. Kitco reported that after the US labour data at 13:30 GMT, gold fell to a fresh intraday low of $3,903.98, down 2.11%, while TokenPost reported a price of $3,895.86, down 2.30%, below the key psychological level of $3,900.

US initial jobless claims for the week ended 7 Nov came in at 200,000, above the 195,000 forecast, with the prior week revised to 191,000, according to Kitco. Softer labour data usually supports gold, but this time prices kept falling, a sign that markets are still focused more on the dollar and interest rates.

Reuters reported that the dollar rose to a 19-month high against major currencies, and FXStreet said the dollar index (DXY) climbed above 103 for the first time since April 2025, after Tuesday’s US October CPI came in hotter than expected and markets added to bets that the Fed will resume hiking rates.

According to CME FedWatch data cited by Reuters, markets have fully priced in a Fed hike at the December meeting and another in March next year. TradingKey put the FedWatch odds of a 0.25% hike at about 90.8% and a 0.50% hike at about 9.2%. Higher rates raise the cost of holding non-yielding gold, while a stronger dollar makes gold more expensive for buyers using other currencies.

FXStreet added that the gold selloff came as Trump played down the prospect of a deal with Iran, reducing hopes of easing tensions in the Middle East.

The next catalyst is the US October Producer Price Index (PPI), due Friday, 13 Nov at 13:30 GMT. A hotter-than-expected print could reinforce Fed hike expectations and keep pressure on gold. On the yen side, USD/JPY climbing toward 160 is another focus, as that is a level where Japanese authorities have intervened before.

Technically, $3,900 is now the level to watch for whether gold can reclaim it. TradingKey reported an intraday low of $3,864, the lowest since October 2025. Traders should be ready for high volatility during the US session and ahead of the PPI data.