Gold prices remained under pressure as concerns over rising inflation in the US heightened expectations of further interest rate hikes by the Federal Reserve. The precious metal traded close to $4,105 an ounce after experiencing a sharp 1.3% drop the previous day. Silver also saw significant losses, holding onto a 6% decline from the prior session.
The latest data from the US Bureau of Labor Statistics revealed that the consumer price index (CPI) surged by 0.6% on a monthly basis, marking the fastest increase since April. This surge was largely driven by higher energy costs, which fueled fears that the Fed may need to take more aggressive action to control inflation.
The market reaction underscored the sensitivity of precious metals to changes in interest rate expectations. Higher rates typically make non-yielding assets like gold and silver less attractive to investors, contributing to the recent downward pressure on their prices.