Quick overview

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Gold and silver prices remained stable on Wednesday as metal traders awaited key U.S. inflation reports expected later this week. The bullion stayed above the critical $3,600-per-ounce mark due to anticipations of a U.S. interest rate cut this month.

XAU/USD was steady at $3,624.39 per ounce after reaching a record high of $3,674 on Tuesday. XAG/USD attracted some buyers today, rising to approximately $41. Amid increasing tensions in the Middle East and a declining U.S. dollar (USD), silver continued to edge higher. Later today, traders will be closely monitoring the U.S. Producer Price Index (PPI) inflation data for August.

The focus is now on U.S. producer price inflation data, which may offer insights into the Federal Reserve’s future interest rate decisions. Silver surpassed $42 per troy ounce for the first time in 14 years on Tuesday, and gold reached $3,700 per troy ounce for the first time on global markets. However, both commodities pulled back from their all-time highs following the release of U.S. employment revision data.

The Nonfarm Payrolls (NFP) report for the year ending March 2025 indicated a decline of 911,000 jobs from the original estimate, according to annual revisions. This revision raised concerns about the state of the U.S. economy and increased expectations of a Federal Reserve interest rate cut, highlighting a much weaker labor market than previously indicated. The non-yielding white metal, silver, may benefit from lower interest rates, as they decrease the opportunity cost of holding it.

Additionally, the ongoing geopolitical unrest in the Middle East could drive demand for precious metals. Bloomberg reported that Israel conducted an attack on senior Hamas leadership in Doha, Qatar. Officials in Qatar claimed this action violated international law and could escalate tensions in the region. The U.S. August PPI inflation report may provide further clues regarding the Fed’s interest rate trajectory. Economists anticipate specific expectations for the headline PPI data.