Precious Metals Drop Despite Lower Yields as Hormuz Tensions Rise

Gold and silver prices fell sharply Thursday as rising oil costs from Middle East escalation reinforced inflation worries. Spot gold traded near $4,021.20 an ounce, down 2.88%, while silver hit $54.440, losing 5.90%. Lower Treasury yields failed to spark safe-haven buying amid expectations of tighter Fed policy.

September CPI rose 0.6% monthly and 3.7% annually, with PPI up 1.3% and 6.3%. Markets see an 84% chance of no rate change at the Oct. 27-28 Fed meeting. Hormuz Strait disruptions keep energy prices elevated, complicating the metals outlook.

U.S. equities closed mixed, with Nasdaq down 2.60% and S&P 500 off 1.21%, while European indices declined amid higher borrowing costs.