Gold and Silver Slide as Hot PPI Boosts Fed Rate Hike Odds

Spot gold and silver prices dropped sharply in early trading after hotter-than-expected U.S. producer inflation, steady jobless claims, and an ECB rate hike reinforced expectations for higher rates for longer. Gold traded near $4,362.30 an ounce, down 0.87%, while silver stood at $64.92, falling 3.34%. August PPI rose 0.4% month-on-month and 5.4% year-on-year, with core prices up 0.3% and 4.7% respectively. Energy costs jumped 4.2% and diesel fuel surged 24.1%. Weekly claims slipped to 206,000 and the ECB raised its benchmark to 2.50% citing energy-driven inflation from the Iran conflict. Markets priced roughly a 60% chance of a Fed hike at the September 15-16 meeting, with 10-year yields near 4.8%. Gold lost the $4,396-$4,422 zone and tested the 200-day EMA at $4,341, while silver broke below both its 200- and 50-day EMAs. Brent crude hovered near $100 amid Hormuz tensions, pushing inflation expectations higher and supporting the case for tighter policy.