US brakes on gold

Gold fell after US President Biden made statements limiting the risk of rising geopolitical tensions following the missiles that hit Poland. Gold fell in response to the strengthening dollar after US President Joe Biden was seen as limiting the risk of a serious escalation in geopolitical tensions between Russia and the West. The precious metal had risen in the previous session after NATO member Poland raised the possibility that a Russian-made rocket was responsible for the explosion that killed two people near the Ukrainian border. The dollar rose after US President Biden said on Wednesday that the rocket was unlikely to have been fired from Russia. Gold, which is priced in dollars and does not bear interest, has traditionally been negatively correlated with the dollar and interest rates. Gold has been under pressure from the aggressive Fed monetary tightening that has seen prices fall about 14% from their March peak throughout the year. Investors are looking for signs of a return to smaller interest rate hikes that could provide support for the precious metal. Data released this week showed that the US producer price index rose 8% in October from a year earlier, the smallest increase since mid-2021. The data raised hopes that the Fed could begin to slow its aggressive tightening.