Precious Metals Crash as Oil Prices Surge and Inflation Concerns Mount

The precious metals market took a hit on Monday, September 28, as spot gold and spot silver prices plummeted sharply in early trading. Spot gold traded near $4,150 per ounce, down 3.16% on the day, while spot silver hovered around $61.504 per ounce, shedding 4.36% intraday.

The sharp decline was driven by a rebound in oil prices, which reinforced the inflation narrative and prompted further market expectations that the Federal Reserve will raise interest rates again.

U.S. Treasury yields have climbed in response to stronger economic data, firm inflation expectations, and rising energy prices, with market pricing shifting toward higher interest rates persisting for longer.

The probability of another rate hike in October now stands at around 68%, 70%, according to traders, while the U.S. dollar index remains near 101 and the yield on the 10-year Treasury has surpassed 5.2%.