GLOBAL BULLION TRACKER

Wednesday’s inflation report put the Federal Reserve back at the center of the metals market.

September CPI rose 0.6% month over month and 3.7% year over year, hotter than expected. Energy was a major contributor, with gasoline accounting for much of the monthly increase.

Gold fell 1.8% to about $4,084 an ounce, its third straight decline, while silver dropped 6.6% to $55.53. Platinum fell 3.5% and palladium 2.8%. The dollar strengthened and Treasury yields moved higher as investors reassessed the Fed outlook.

Prediction markets reacted immediately.

Before CPI, Kalshi traders assigned only a 16% probability of a 25-basis-point October Fed hike. After the report, that probability jumped to 33%, while the odds of no change fell from 84% to 66%.

That is an important distinction.

The inflation report clearly increased the probability of additional tightening, but prediction markets still see no October move as the more likely outcome.

Fed-funds futures were somewhat more hawkish immediately after CPI, briefly putting the October hike probability above 40%, although those expectations later eased as Fed officials emphasized patience.

The broader message remains: another hike this year is much more likely than it looked before CPI, even if October is far from certain.

The inflation surprise is heavily tied to energy.

Oil remains above $100, with Brent around $106 Wednesday as Middle East tensions continued to threaten shipping and regional supply.

That creates a difficult policy problem.

Higher interest rates cannot produce more oil, but expensive energy can spread through transportation, freight, airfare and consumer prices. The Fed therefore risks tightening into a slowing labor market while trying to contain inflation partly driven by external supply shocks.

That tension will remain important for gold.

The short-term price action looks weak, but the investment-flow story looks very different.

Global gold ETFs attracted $10 billion in September, adding 67 tonnes and lifting total holdings to a record 4,256 tonnes. Third-quarter inflows reached a record $31 billion.

That happened even as gold fell 8.5% during September.

Meanwhile, COMEX managed-money positioning fell by the equivalent of 84 tonnes, highlighting a sharp divide between longer-term ETF buyers and leveraged futures traders.

Central banks also remain active. Official institutions bought a net 39 tonnes in August, bringing reported year-to-date purchases to 170 tonnes, led by China, Uzbekistan and Poland.

Silver’s decline to the mid-$50s represents significantly more technical damage than gold’s pullback.

The former $60–$61 support area now becomes resistance. Silver would need to reclaim that range before the recent selloff begins to look like stabilization rather than continued deterioration.

Its longer-term supply story remains constructive, but right now macro forces are overwhelming it.

Hotter CPI pushed yields and the dollar higher and knocked gold below $4,100, while silver suffered an even steeper decline.

But the most interesting signal may be what did not happen.

Even after the inflation surprise, Kalshi still gives the Fed only about a one-in-three chance of hiking in October.

At the same time, ETF investors and central banks continue accumulating gold despite falling prices.

Short-term traders are focused on rates. Long-term investors are still buying gold.

Sources: U.S. Bureau of Labor Statistics, Federal Reserve, World Gold Council, Reuters, Kalshi, Global Bullion Tracker.

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For informational purposes only. Nothing in this publication constitutes investment advice.