Gold and Silver Prices Plummet as US Inflation Surpasses Expectations

The prices of gold and silver plummeted on Thursday after the US producer price index (PPI) rose more than expected. The inflation data reinforces expectations of a Federal Reserve interest rate hike, while the European Central Bank (BCE) also raised its main policy rates.

According to Anadolu Agency, the price of silver fell 5.5% to $63.62 per ounce at 19:05 GMT, while gold prices dropped 1.8% to $4,318.60 per ounce. The pressure on precious metals emerged after the US PPI rose 0.4% month-over-month in August.

The annual inflation rate for producers reached 5.4%, surpassing the market-estimated 5.3%. This figure also surpassed the revised growth of 4.8% in July. The increase is attributed to higher energy prices and the growing costs being transmitted to various sectors of the economy.

These numbers strengthen the hope that the Fed might resume monetary tightening to contain inflationary pressure. Markets estimate a more than 70% chance that the Fed will raise interest rates at its meeting on September 16.