Gold and silver suffered their sharpest one-day losses in weeks on Wednesday, as a hotter-than-expected U.S. inflation report revived bets on a Federal Reserve rate increase and sent investors rushing out of precious metals.
Gold fell below $4,100 an ounce and silver plunged roughly 6%, according to Kitco News, after the Labor Department reported that consumer prices rose 3.7% in September from a year earlier, above the 3.6% forecast and up from August's 3.4% pace. Higher interest rates make non-yielding assets like gold and silver less attractive relative to bonds and cash, and traders moved quickly to price in a greater chance that the Fed raises rates rather than holds steady this month.
The move extended a rougher stretch for gold that had begun even before the inflation data landed: bullion had already fallen for three straight sessions as markets braced for the report. Strategists at Natixis said the print was "far enough from consensus" to put an October rate increase back in play, a call that hit sentiment across metals markets within minutes of the release.
A rally interrupted, not necessarily reversed
The selloff follows a banner year for precious metals. The World Gold Council has said gold ETFs pulled in a record $31 billion in the third quarter even as bond yields climbed, and gold had been trading near all-time highs for much of 2026 on a mix of central-bank buying, geopolitical tension and bets that the Fed's rate-cutting cycle would continue. Silver had rallied even harder, with some analysts, including Bloomberg's Mike McGlone, suggesting prices could revisit $50 an ounce on tight industrial supply.
Not every desk sees Wednesday's drop as the start of a longer downturn. Jefferies told clients, per market commentary tracked by Kitco, that gold's near-term weakness looks like a buying opportunity, maintaining a 2027 price target of $5,000 an ounce and noting that mining companies' margins remain healthy even after the pullback. UBP strategist Patrick Kinsella separately pointed to talk of a U.S. Treasury gold revaluation as a potential catalyst that could reignite the metal's rally if upward pressure on yields fades.
For now, the metals market is in the same position as the rest of Wall Street: waiting to see whether September's inflation spike was a one-month aberration tied mainly to gasoline prices, or the start of a more durable shift that forces the Fed's hand. Traders will get another read on the economy's trajectory from upcoming producer-price and employment reports, with futures markets already assigning meaningfully higher odds to a rate increase at the Fed's next meeting than they did a week ago.
