Gold and silver slide as hot PPI lifts Fed rate-hike odds to ~70%

Precious and base metals took a heavy hit on Thursday, September 10, after a hotter-than-expected US producer price report collided with crude oil trading above $105 a barrel. The combination pushed market-implied odds of a Federal Reserve rate increase next week to about 70%, and metals that thrive on cheap money buckled.

Gold slipped while silver plunged. Micro gold futures were quoted around $4,713 an ounce, down roughly 3.8% on the session, according to Mining.com's tally. Silver, which trades with far more volatility, fell alongside a violent move lower in copper.

Copper was the day's biggest casualty. Comex December copper dropped as much as 5.4% to $6.516 a pound, a day after settling at a record $6.8885, after a report that the White House's refined-copper tariff plan had stalled. That yanked support out from under a metal that had printed records in four straight sessions, and the reversal rippled through the entire metals and mining complex.

The through-line for bullion is straightforward. A possible Fed hike raises the opportunity cost of holding metal that pays no yield. When Treasury yields climb and the market prices in tighter policy, gold and silver lose one of their tailwinds, and money that had crowded into the trade heads for the exit.

The setup didn't appear out of nowhere. Earlier in the week, spot gold was already trading near $4,392 and silver near $65.74 as rising oil and elevated yields kept pressure on non-yielding metals ahead of the inflation prints. Thursday's PPI simply confirmed the direction and accelerated it.

Context matters here. The Fed has held its policy rate in the 3.50%-3.75% range since December, so a hike would mark a genuine pivot rather than a continuation. With producer prices still running hot, traders leaned into the view that the central bank tilts toward tightening next week.

Step back from the one-day tape and the picture is less dramatic. Gold near $4,700 and silver in the mid-$60s remain historically elevated. What buyers are watching is a sharp near-term repricing driven by rate expectations, not a collapse in the longer-run case for hard assets.