Spot gold fell below $4,000 an ounce late Wednesday as hotter-than-expected US inflation strengthened the dollar and raised expectations for further Federal Reserve rate hikes. Silver edged higher, while oil rebounded amid uncertainty over the Strait of Hormuz. A recovery in global equities added to the mixed backdrop for precious metals.
Gold slips while silver edges higher
Spot gold was down $48.60, or 1.21%, at $3,983.20 an ounce late Wednesday. Spot silver gained $0.149, or 0.29%, to $51.560. Gold rose earlier in the session before giving back its gains and falling below the $4,000 mark. A stronger dollar makes dollar-priced gold more expensive for overseas buyers, while higher interest-rate expectations increase the opportunity cost of holding non-yielding bullion.
US consumer price index data for October, released Tuesday, showed headline inflation rising 0.4% month over month, above the 0.3% forecast. Core CPI increased 0.3%, also exceeding expectations. Housing costs rose 0.3%, food prices climbed 0.5% and energy prices increased 0.7%. The Bureau of Labor Statistics did not publish the annual inflation rate for October because comparable data for October 2025 were unavailable following the federal government shutdown.
Employment figures released earlier also pointed to a resilient labor market. The US added 165,000 jobs in October, the unemployment rate fell to 4.1%, and average hourly earnings rose 0.4% from the previous month. The combination of stronger-than-expected inflation and firm employment reinforced expectations that the Fed could continue tightening policy.
Markets price in a December rate increase
Futures pricing on Wednesday put the probability of a 25-basis-point rate hike at the Fed’s December 8–9 meeting at about 87.1%, and the probability of a 50-basis-point increase at 12.9%. A further hike was largely priced in, with investors divided mainly over its size.
The US dollar index rose about 0.7% to around 102.90, near its highest level since April 2025. The 10-year US Treasury yield briefly moved above 5.00% on Tuesday. Treasury markets were closed Wednesday for Veterans Day, leaving Tuesday’s yield as the latest regular-session reference.
Weekly initial jobless claims, due Thursday, and the October producer price index, scheduled for Friday, are the next data points for assessing the Fed’s policy outlook. Both reports are due at 8:30 a.m. Eastern time. Cooler producer inflation could ease concerns about further tightening; another upside surprise could reinforce rate-hike expectations.
Strait of Hormuz uncertainty lifts oil
The diplomatic standoff between Iran and the United States remained unresolved. Mohsen Rezaei, Iran’s security affairs chief, said Tehran would not allow enriched nuclear material to leave the country and that the US must first respond to Iran’s conditions before talks and a reopening of the strategic waterway could move forward. Restrictions on commercial shipping remain in place, while reports of further attacks on vessels have heightened concerns about energy supplies in the Gulf. Qatar continues to mediate, while US President Donald Trump has recently played down the prospect of further large-scale military strikes.
Oil settled higher Wednesday as expectations for a near-term diplomatic breakthrough faded. Brent crude futures rose $1.27, or 1.39%, to settle at $92.76 a barrel. US West Texas Intermediate gained $0.49, or 0.57%, to $86.53. Both benchmarks rebounded from two-month lows reached Tuesday. Higher oil prices and geopolitical uncertainty can support safe-haven demand, but rising energy costs may also add to inflation pressures, keeping Fed policy expectations central to precious-metals trading.
Tech shares lead gains in North America and Europe
North American equities broadly advanced Wednesday, led by artificial intelligence-related companies and semiconductor stocks, recovering from Tuesday’s declines after the inflation data. The Dow Jones Industrial Average rose about 0.5% to 52,486.49. The S&P 500 gained 1.3% to 7,619.38, the Nasdaq Composite added 1.6% to 25,466.19, and the Russell 2000 climbed about 0.9% to 2,846.26. Strong quarterly results from cloud-computing company CoreWeave revived interest in AI-related investments, though elevated valuations and borrowing costs remained concerns.
Canada’s S&P/TSX Composite Index rose 241.27 points, or 0.67%, to 36,411.72. Technology, energy and financial shares supported the index, while gold miners were weighed down by the decline in bullion.
In Europe, the pan-European Stoxx 600 rose 0.72% to 663.04, a record closing level. Germany’s DAX gained 1.20%, France’s CAC 40 rose 0.66%, the UK’s FTSE 100 added 0.78% and Italy’s FTSE MIB advanced 0.37%. Technology stocks and improving corporate results supported the gains. Siemens Energy stood out after giving a positive revenue outlook.
Key levels for gold and silver
For spot gold, initial resistance is near $3,987.96 and $4,020, followed by reference levels at $4,064.71 and $4,115.78. Support is at $3,910 and $3,890. For spot silver, resistance is at $52.124 and $53.119, with further reference levels at $53.710 and $55.360. Support is at $51.090 and $50.586, followed by the $48–$47 range.
The dollar index was near 102.90 on Wednesday, while the latest regular-session reference for the 10-year Treasury yield remained around 5.00%. Brent and WTI settled at $92.76 and $86.53 a barrel, respectively. The upcoming US jobless claims and PPI reports will test whether inflation and employment data continue to support expectations of further Fed rate increases.