Gold fell more than 1% and silver about 4% on Wednesday after US consumer prices rose faster than expected in September, strengthening bets on another Federal Reserve rate hike this year.
At a glance
- US consumer prices rose 3.7% from a year earlier in September, above the 3.6% economists expected.
- Spot gold traded near $4,110 an ounce in early US trading, down 1.18%, Kitco reported.
- In India, December silver futures on the MCX fell 3.68% to Rs 2,11,143 per kg.
Background
Gold and silver pay no interest, so they tend to lose appeal when interest rates rise. The US Federal Reserve raises rates to fight inflation. When inflation comes in hotter than expected, traders bet on more rate hikes. That usually lifts the dollar and bond yields, which pushes precious metals lower.
What happened
Spot gold fell 1.18% to about $4,110.90 an ounce in early US trading on Wednesday, while spot silver dropped 1.97% to $57.89, Kitco reported. Silver kept falling and was later quoted at $56.97, down 4.16%, according to Reuters data cited by The Economic Times.
Indian prices followed. MCX spot gold slipped 1.03% to Rs 1,45,615 per 10 grams in the evening session, Moneycontrol reported. December silver futures on the Multi Commodity Exchange (MCX) traded 3.68% lower at Rs 2,11,143 per kg.
Why prices fell
The trigger was September's US consumer price index (CPI). It rose 0.6% on the month and 3.7% from a year earlier, above the 3.6% consensus and up from 3.4% in August. Gasoline jumped 9.1%, showing that the oil shock is feeding straight into inflation.
Hotter inflation strengthens the case for a Fed rate hike by December, which minutes of the Fed's last meeting had already signalled. Higher rate expectations lift the dollar and bond yields, and gold pays no yield of its own. The 10-year US Treasury yield traded near 5.2%, Kitco said.
What it means for India
A stronger rupee added to the pressure on domestic prices. The rupee firmed against the dollar as Reserve Bank of India curbs on dollar buying supported the currency, Moneycontrol reported. A stronger rupee lowers the local cost of imported gold.
Silver fell harder because rising rates also raise worries about industrial demand. Kaveri More of Choice Broking said MCX silver broke below a key support zone of Rs 2,17,600 to Rs 2,12,600, which could add to the selling pressure.
Our read
Outlook: bearish. Hotter inflation keeps a December Fed hike in play, which supports the dollar and yields and weighs on gold and silver. Middle East tension remains a partial offset.
What to watch
- Thursday's US producer prices, retail sales and jobless claims data.
- Fed Chair Kevin Warsh's appearance at the IMF on Friday.
- Oil prices and shipping attacks around the Strait of Hormuz.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-10-24.
Detailed analysis
Timeline
- 2026-10-14: US September CPI rises 3.7% year on year, above the 3.6% forecast.
Inflation
US CPI rose 3.7% year on year in September, driven by a 9.1% jump in gasoline.
Interest Rates
The data reinforced expectations of a Fed rate hike by December, with the 10-year yield near 5.2%.
Currency Impact
A firm dollar weighed on metals globally, while a stronger rupee pushed Indian prices lower.
What could lift prices
- Attacks on shipping and oil facilities in the Middle East keep safe-haven demand alive.
- Soft producer prices or weak retail sales on Thursday would ease rate-hike pressure.
What could weigh on prices
- A December Fed rate hike looks more likely after the CPI data.
- Higher oil prices are feeding inflation, which keeps yields high.
Country impact
| Country | Impact | Reason |
|---|---|---|
| United States | High | Its inflation data and Fed policy drove the global selloff. |
| India | Medium | MCX gold and silver fell, with a stronger rupee adding to the drop. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Jewellery | Positive | Lower gold and silver prices reduce the cost of new jewellery. |
| Bullion Trading | Negative | Falling prices cut the value of bullion stocks held by traders. |
Who gains, who loses
- Jewellery buyers in India: Lower prices make gold and silver purchases cheaper.
- Gold and silver investors: Their holdings lost value as prices fell.
Other ways this could play out
- If Thursday's producer prices come in soft, gold could recover part of Wednesday's losses.
- If oil keeps rising on Hormuz attacks, inflation fears could keep pressure on metals.
Price risks
- An escalation in the Middle East could revive safe-haven buying.
- A dovish tone from Fed Chair Warsh would weaken the dollar and support gold.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
United States
India