Gold rebounds above $4,050 as silver surges nearly 3% despite Fed rate hike concerns

Gold and silver prices advanced on Wednesday, November 11, recovering from the previous session's losses as bargain hunting supported precious metals, although expectations of further US interest rate increases continued to limit gold's recovery.

Silver outperformed gold, gaining nearly 3%, while investors assessed the implications of stronger-than-expected US inflation and increasingly hawkish Federal Reserve officials.

Price overview

As of 09:39 GMT, spot gold rose approximately 0.4% to $4,048.70 per ounce, after trading between $4,025.80 and $4,067.90.

Spot silver climbed approximately 2.8% to $53.55 per ounce, extending its recovery following Tuesday's decline.

Gold recovers from Tuesday's selloff

Gold attracted renewed buying interest after losing more than 2% on Tuesday, when stronger US inflation figures pushed Treasury yields higher and strengthened expectations of another Federal Reserve interest rate increase.

October's consumer price index rose 0.4%, exceeding expectations of 0.3%, while core inflation advanced 0.3%, compared with forecasts of 0.2%.

The figures reinforced concerns that underlying inflation remains too persistent for policymakers to ease their restrictive stance.

Fed tightening remains a major obstacle

Federal Reserve Governor Christopher Waller indicated Tuesday that he would support a 25-basis-point rate increase in December, while leaving open the possibility of a larger adjustment if inflation remained elevated.

Higher interest rates generally reduce the appeal of non-yielding assets such as gold.

Silver outperforms

Silver's stronger advance reflected renewed buying following recent volatility, with the metal benefiting from both investment demand and its industrial applications.

However, expectations of tighter monetary policy remain a risk to further gains.

Market outlook

Gold faces immediate resistance around $4,068, followed by $4,100, while support stands near $4,025.

Silver could encounter resistance around $53.60, with initial support near $52.90.

The direction of both metals will depend largely on Treasury yields, dollar movements and further signals from Federal Reserve officials.