Inflation Fears Crush Gold, Silver; Fed Cuts Unlikely

This data significantly dampened expectations for Federal Reserve interest rate cuts in 2026. Futures markets now place worse-than-even odds on a cut before December, with a 40% chance of no change by year-end, a tenfold increase from last month's projections which anticipated a June cut.

The inflation surprise, coupled with surging global crude oil prices (Brent above $108, WTI near $100), reignited stagflation fears, causing Western stock markets and government bond prices to drop. Gold experienced a 3.2% decline to 6-week lows at $4837 per ounce, while industrially-useful silver fell 5.3% to a one-month low beneath $76.

The article highlights gold's increased volatility, noting 18 daily swings of $100 or more per ounce in 2026, surpassing all previous years combined. Unexpected US crude oil stockpile increases were offset by significant drops in refined product inventories, particularly gasoline, indicating underlying demand despite overall inventory rises.