CPI Data Release & Houthi Conflict: Key Drivers for Gold and Silver Prices
The market's focus is shifting to Friday's US Consumer Price Index (CPI) data release, which could have significant implications for gold and silver prices. Analysts are forecasting a 0.4% increase in headline inflation from August and a 3.4% annual increase. If core inflation exceeds expectations, it may justify tighter monetary policy, making the opportunity cost of holding precious metals that yield nothing higher.
The ongoing conflict between Iran-allied Houthis and Saudi Arabia's forces has added to the 'gold puzzle' by threatening global energy supply. A prolonged conflict could draw interest to gold as a safe haven, while inflation expectations would strengthen even more, pushing for tighter monetary policy.
Silver's physical market is expected to have a structural deficit throughout 2026, causing physical demand to outpace supply. This, combined with industries looking to reduce their consumption of silver to zero, will lead to a physical supply deficit.