Gold and silver prices were sharply lower by midday Wednesday, with gold falling to a six-week low and silver dropping to a four-week low. The decline came as investors reacted to a hotter-than-expected U.S. inflation report and rising concerns that the Federal Reserve may keep interest rates elevated for longer.
April gold was last down $129.00 at $4,879.20, while May silver fell $2.786 to $77.08. In spot trading, gold was near $4,883.20 an ounce, down more than 2% on the day, after touching a low near $4,844.20. Spot silver fell as much as 4.2% to $75.93.
The biggest driver of the sell-off was the latest U.S. Producer Price Index report, which showed wholesale inflation rising much faster than expected. U.S. producer prices rose 0.7% month-over-month in February 2026, compared with 0.5% in January and well above forecasts for a 0.3% increase. That marked the largest monthly gain in producer prices in seven months. Goods prices surged 1.1%, their biggest increase since August 2023.
Core PPI, which excludes food and energy, rose 0.5%, following January’s 0.8% increase and also beating expectations for a 0.3% rise. On an annual basis, headline producer inflation climbed to 3.4%, the highest in a year, while core producer inflation also moved higher, reaching around 3.9% in market estimates. Because producer prices often lead consumer inflation, the report raised fresh worries that price pressures remain persistent throughout the economy.
Gold was already under pressure before the inflation data was released, and the report intensified the selling. The market has struggled since losing support at the $ 5,000-per-ounce level, and Wednesday’s data added further downside momentum. The stronger inflation reading reduced hopes for near-term interest rate cuts from the Federal Reserve. That is typically negative for gold and silver, which offer no yields and often become less attractive when interest rates remain high.
In addition to inflation data, a stronger U.S. dollar and rising oil prices also weighed on the metals market. A stronger dollar makes gold and silver more expensive for buyers using other currencies, which tends to reduce international demand. At the same time, oil prices remained elevated, with Brent crude trading above $100 per barrel. Rising energy prices have added to inflation concerns and increased fears that broader price pressures could intensify in the months ahead.
Geopolitical risks are also playing a major role in shaping market sentiment. The ongoing conflict in the Middle East has pushed oil prices higher and raised concerns about supply chain disruptions across the region.
Economists point out that February’s sharp rise in producer prices was recorded before the latest escalation involving the U.S., Israel, and Iran had fully affected global markets. That means inflation was already running hot even before the conflict added another layer of pressure.
While geopolitical uncertainty often supports safe-haven demand for gold, in this case, the conflict’s inflationary impact is strengthening expectations that the Fed will hold rates steady for longer, limiting gold’s traditional appeal.
Investors are now focused on Federal Reserve Chair Jerome Powell, who is expected to provide insight into how policymakers are weighing inflation risks, economic growth concerns, and the consequences of war in the Middle East.
The Fed is widely expected to leave interest rates unchanged, but traders will be watching closely for updated economic projections and Powell’s comments during his press conference. Markets are especially interested in how the central bank is interpreting the surprisingly hot PPI report and whether officials now see inflation as a more persistent threat. Powell is likely to emphasize that the Fed needs more time to evaluate the economic impact of the Middle East conflict and determine how long inflation pressures may last.
The decline was not limited to gold and silver. Other precious metals also moved lower, showing a broader shift in sentiment across the sector. Platinum fell about 4.5% to $2,028.12, and Palladium dropped around 4.7% to $ 1,526.20. This wider sell-off suggests that investors are pulling back from metals more generally as they reassess inflation, rates, and global risk.
The near-term outlook for gold and silver remains uncertain. On the one hand, persistent inflation, a strong dollar, high oil prices, and expectations of steady interest rates are all pressuring metals. On the other hand, geopolitical instability and economic uncertainty continue to offer some safe-haven support. Whether prices continue to fall or begin to recover will likely depend on three main factors, Future inflation data, Federal Reserve policy signals and Developments in the Middle East. If inflation remains elevated and the Fed maintains a firm stance, precious metals could stay under pressure. However, if geopolitical tensions worsen and investors seek protection from broader market instability, gold and silver could find support again.
For now, investors are being advised to closely monitor central bank decisions, inflation trends, oil prices, and geopolitical developments before making major moves. Market volatility is likely to remain high, and price direction could shift quickly in response to new economic or political headlines. In the short term, gold and silver are facing intense macroeconomic pressure. Safe-haven demand still exists, but for now it is being overshadowed by sticky inflation, rising energy costs, and a Federal Reserve that appears in no rush to cut rates.