Gold Prices Plummet 2%, Silver Drops 5%: US Data Triggers Panic

Gold prices plummeted by more than 1% after robust United States inflation data and rising oil prices increased speculation that the Federal Reserve (The Fed) will raise interest rates next week.

According to Refinitiv, the price of gold closed at US$ 4,315.69 per troy ounce at the end of Thursday’s trading (10/09/2026), representing a 1.93% drop. This decline reverses the 1.06% gain recorded on Wednesday.

Gold prices remained almost stagnant today. As of Friday (11/09/2026) at 06:24 WIB, gold was priced at US$ 4,315.8, a marginal increase of 0.003%.

Kyle Rodda, a senior market analyst at Capital.com, stated that the Producer Price Index (PPI) data indicates underlying inflationary pressures within the US economy, partly driven by rising energy costs. “The PPI data shows a slight increase in underlying inflation in the US economy, partially caused by rising energy costs,” Rodbar noted.

Data from the US Department of Labour showed that US producer price inflation for final demand rose by 0.4% last month, after an increase of 0.1% in July. The July figure was also revised upwards.

This inflation data immediately shifted market expectations regarding the Federal Reserve’s monetary policy. According to the CME FedWatch Tool, market participants now estimate a 70% probability of a US interest rate hike next week, up from 62% before the inflation data was released.

However, a majority of economists surveyed by Reuters still expect the Fed to maintain interest rates during the 15-16 September meeting and to leave them unchanged until the end of the year.

The strengthening US dollar has also weighed on gold. A stronger dollar makes gold, which is priced in greenbacks, more expensive for holders of other currencies.

Pressure is also coming from the rise in 10-year US Treasury yields. The US Dollar Index has reached a level of 99.05, its highest in three days, while the 10-year US Treasury yield surged to 4.98%, its highest since October 2023.

As gold offers no yield, the rise in US Treasury yields makes gold less attractive. According to Rodda, rising oil prices mean the bond market must reflect higher and more persistent inflation risks, a condition that is also weighing on gold prices.

Rising bond yields typically serve as negative sentiment for gold, as they increase the opportunity cost of holding non-yielding assets like gold.