Gold mining equities traded higher on Wednesday as spot bullion recorded a modest recovery following a steep decline the previous session triggered by surprisingly strong U.S. inflation data.
In premarket activity in New York, Newmont gained 0.7%, Barrick Mining rose 1.3% and Agnico Eagle Mines added 1%. In London, several FTSE 100-listed mining firms also advanced: Antofagasta climbed 2.3%, Glencore was up 2.2% and Anglo American gained 2%.
The precious metals complex broadly moved higher. Spot gold rose 0.3% to $4,043 an ounce, while gold futures were up 0.6% at $4,054. Other metals showed strength as well, with silver higher by 3.1%, copper up 1% and palladium jumping 5.8%.
The rebound came after gold tumbled more than 2% on Tuesday when October's consumer price index printed above expectations for a third consecutive month. That stronger inflation reading prompted an increase in Treasury yields and a firmer dollar as investors reevaluated the likely path of interest rates. Higher yields and a stronger dollar generally exert downward pressure on gold.
Market pricing reflected a renewed expectation of tightening by the U.S. central bank. According to the CME FedWatch tool, traders were assigning a probability of a rate increase at the Federal Reserve's Dec. 9 meeting, and the chance of a larger 50-basis-point move had risen to 14.9% from 8% the day before.
Comments from Federal Reserve officials added to the market’s repricing. Fed Governor Christopher Waller said on Tuesday that a 50-basis-point hike should be considered in December if inflation remained elevated, a remark that contributed to pressure on gold the prior session.
Taken together, the market action on Wednesday shows bullion and mining shares attempting to recover after a sharp inflation-induced selloff. Prices and investor positioning remain sensitive to incoming inflation data, moves in Treasury yields, and statements from policy makers.