Gold Prices Plunge 3.5% as Surging U.S. Inflation Dampens Federal Reserve Rate-Cut Expectations

On Wednesday, Dec. 11, gold prices fell approximately 3.5% toward $4,100 per ounce, marking their lowest level since late November 2025. This decline followed data from the U.S. Bureau of Labor Statistics (BLS) showing headline inflation accelerated to 4.2% year-over-year in May, the highest since April 2023. Energy costs, which rose 3.9% in May, accounted for over 60% of the monthly consumer price increase. Consequently, traders have tempered expectations for Federal Reserve rate cuts in 2026, as persistently high interest rates increase the opportunity cost of holding non-yielding bullion. Despite reports of exchanged strikes between the U.S. and Iran and heightened rhetoric from Donald Trump, safe-haven demand failed to offset the impact of the hawkish macroeconomic outlook.