Price Movement – Gold and silver came under selling pressure on Wednesday as traders booked profits following a stronger-than-expected US PPI print, which reinforced expectations that the Federal Reserve could raise interest rates. Attention now shifts to today’s US CPI release for further confirmation of the inflation trajectory. Adding to the hawkish undertone, the European Central Bank lifted its own borrowing costs in line with forecasts and cautioned that inflation risks still skew to the upside — a signal that pushed traders to raise their bets on additional ECB tightening ahead.

Geopolitical tensions – Tensions in the Middle East escalated further after Iran-aligned Houthi forces took control of Yemen’s port city of Mocha, pressing their advance down the Red Sea coastline toward a cluster of strategically important islands, according to military sources. The development came just hours after President Donald Trump suggested the conflict with Iran could wind down only after the US midterm elections — a remark that did little to ease investor unease over the region’s trajectory.

Macro-Economic Signals – US producer prices climbed 0.4% in August, pushing the annual PPI reading to 5.4% — above the 5.3% consensus forecast. The upside surprise was largely driven by a sharp jump in energy costs, though data also pointed to broader cost pass-through across other sectors of the economy. In response, traders raised the probability of a Fed rate hike at next week’s meeting to over 70%, cementing expectations of tighter policy ahead.

Technical Triggers

Gold looks poised to hold within a $4,300 (~₹150,000) to $4,500 (~₹157,000) range for now, with a buy-the-dip, sell-the-rally strategy favoured until a clearer trend emerges.

Silver, meanwhile, remains locked between $63 (~₹230,000) and $68 (~₹243,000), and a decisive move in either direction will likely hinge on a breakout or breakdown from this band.

Dr.Renisha Chainani, Head- Research, Augmont