Gold and silver retreat as Fed rate hike expectations rise ahead of US inflation data

Gold and silver prices declined on Tuesday, November 10, as investors took profits following Monday's rally and reassessed the outlook for US interest rates ahead of October's consumer price index report.

Hawkish remarks from Federal Reserve Governor Christopher Waller added pressure to precious metals, strengthening expectations of another interest rate increase in December.

Price overview

As of 09:41 GMT, spot gold traded near $4,095 per ounce, down approximately 1.1%, after moving between $4,088 and $4,147 earlier in the session.

Spot silver traded around $53.15 per ounce, declining approximately 0.5%, after Monday's 3.5% advance.

Fed's Waller strengthens rate hike expectations

Waller indicated that a 50-basis-point interest rate increase could be necessary in December if October's core inflation reaches 3% or higher.

He also expressed support for a 25-basis-point increase even if inflation moderates from September.

Following his remarks, market expectations for a quarter-point increase in December climbed to 97% from 84%, while the probability of unchanged rates fell to 3%.

Higher borrowing costs generally weigh on non-yielding assets such as gold and silver.

US inflation data takes center stage

Investors are awaiting October's US consumer price index figures, which could provide further clarity on the Federal Reserve's next policy decision.

Meanwhile, declining oil prices have reduced concerns about energy-driven inflation, although geopolitical uncertainty continues to support underlying demand for safe-haven assets.

Market outlook

Gold faces immediate resistance near $4,140, followed by $4,150, while support stands around $4,088.

Silver could encounter resistance near $53.65, with initial support around $52.90.

Both metals remain vulnerable to further selling if inflation exceeds expectations and strengthens the case for more aggressive monetary tightening.