Nov 11 (Reuters) - Gold prices climbed on Wednesday, but stayed near the $4,000 level after a sharp selloff in the previous session driven by hot US inflation data and hawkish policymakers' comments that boosted bets on further and larger rate hikes.
Spot gold rose 0.6% to $4,055.00 per ounce by 1122 GMT after dropping around 3% to $4,013.29 on Tuesday. US gold futures for December delivery was up 0.8% at $4,063.20 per ounce.
"Gold is seeing some slight relief after its post-CPI declines," said Han Tan, chief market analyst at Bybit.
"However, it's a tough ask for gold bulls to keep pushing prices higher given the prospects of more Fed rate hikes in the pipeline."
Data released on Tuesday showed US consumer prices rose more than expected in October, with the CPI increasing 0.4%. Economists polled by Reuters had forecast a 0.3% rise.
Traders raised the odds of a December Federal Reserve rate hike to 100% from 84% before the data, as per CME's FedWatch tool, opens new tab. Expectations of a larger, half-percentage-point hike also increased.
Ahead of the data, Fed Governor Christopher Waller said a core inflation reading of 0.3% in October would prompt him to consider a half-point hike at the December meeting.
Other policymakers also maintained a hawkish tone, with Fed Bank of Philadelphia President Anna Paulson signalling further US rate hikes and Fed vice chair for supervision Michelle Bowman reaffirming the central bank's focus on curbing price pressures.
Although gold is typically seen as an inflation hedge, higher interest rates diminish its appeal, as gold bullion pays no interest.
Among other metals, spot palladium gained 5.6% to $1,082.57 per ounce, having hit its highest level since October 22.
"Palladium's sharp rebound appears primarily driven by short covering and position adjustments following an increasingly oversold market," said Ole Hansen, head of commodity strategy at Saxo Bank.
"For now, I believe positioning rather than any fundamental shift in supply and demand is doing most of the heavy lifting," Hansen added.
Spot silver climbed 3% to $53.03 per ounce.
Reporting by Sherin Sans and Swati Verma in Bengaluru; Editing by Ronojoy Mazumdar and Vijay Kishore
