DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Gold and silver prices plunged in late U.S. trading Tuesday after hotter consumer inflation strengthened expectations for another Federal Reserve interest rate increase in December. Rising Treasury yields and a firmer dollar intensified the pressure on precious metals.

Spot gold traded near $4,031.80 an ounce, down $107.60, or 2.60%. Spot silver changed hands near $51.410, falling $1.894, or 3.55%, as investors confronted the possibility of a larger policy adjustment.

The Labor Department reported that the consumer price index rose a seasonally adjusted 0.4% in October, topping economists’ expectations for a 0.3% increase. The reading slowed from September’s 0.6% rise but showed that inflationary pressure remained persistent.

Core consumer prices, which exclude food and energy, increased 0.3%, exceeding expectations for a 0.2% gain. That matched the monthly increases recorded in August and September, reinforcing concerns that restrictive monetary policy may remain in place longer than previously anticipated.

Most annual inflation rates for October were not published because the October 2025 federal government shutdown prevented the Bureau of Labor Statistics from collecting comparable data. The absence of annual headline and core readings placed greater importance on the monthly figures and underlying components.

Shelter costs rose 0.3% and accounted for more than 30% of the monthly increase in consumer prices. Food prices advanced 0.5%, grocery prices gained 0.4%, and the energy index climbed 0.7% after surging 5.2% in September.

Gasoline prices increased 1.0%, electricity costs rose 0.9%, and natural gas prices declined 0.8%. Recreation, medical care, motor vehicle insurance, and household furnishings also became more expensive, while used vehicle prices fell.

Futures market pricing showed an 88.2% probability of a 25 basis point increase at the Federal Reserve’s Dec. 8 and 9 meeting. Traders assigned an 11.8% probability to a 50 basis point move, bringing the larger adjustment into sharper focus.

The Fed kept its benchmark target range unchanged at 3.75% to 4.00% during its October meeting, although two policymakers favored an immediate increase. Federal Reserve Governor Christopher Waller indicated Tuesday that rates should rise in December and that a larger increase could be appropriate if underlying inflation remained elevated.

Richmond Federal Reserve President Tom Barkin took a more cautious position Monday, stressing the need to review incoming information before deciding on December policy. The October core reading nevertheless met the threshold Waller identified for considering a 50 basis point adjustment.

Treasury yields climbed sharply as investors repriced the policy outlook. The benchmark 10 year yield briefly exceeded 5.00%, while the two year yield approached 4.75% before trading near 4.725%, roughly 18 basis points higher during the session.

Friday’s employment report added to the pressure surrounding the inflation figures. October nonfarm payrolls increased by 165,000 against expectations for approximately 65,000 jobs, while unemployment declined to 4.1% from 4.2% and average hourly earnings rose 0.4%.

U.S. equities finished lower as higher yields revived concerns about monetary policy. The Dow Jones Industrial Average lost 0.30%, the S&P 500 fell 0.38%, the Nasdaq Composite declined 0.74%, and the Russell 2000 dropped 0.68%.

Crude oil also settled lower after concerns about immediate military escalation involving Iran eased, although Iranian officials questioned the prospects for negotiations. Brent crude declined 1.17% to $91.49 a barrel, while Nymex WTI fell 0.93% to $86.04.

Gold bears are targeting a break beneath the $4,020.00 to $4,000.00 support zone, with deeper targets at $3,910.00 and $3,890.00. Silver faces support at $51.270 and $51.000, while a break below $51.000 would expose targets at $50.010 and $48.000.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.