Gold and Silver Prices Plummet as US Producer Inflation Surges

Gold and silver prices plummeted on Thursday after US producer inflation rose higher than expected. The data reinforced expectations of a Federal Reserve rate hike, which is likely to happen at its September 16 meeting.

The US Producer Price Index (PPI) rose 0.4 percent in August on a monthly basis, surpassing the market forecast of 5.3 percent annual growth. The figure also increased from the revised July growth of 4.8 percent.

The rise in producer inflation was driven by a surge in energy prices and signs that rising costs are spreading to various economic sectors. As a result, money markets now price in more than a 70 percent chance of a rate hike at the Fed's meeting next week.