Silver fell faster than gold on Thursday 29 October as investors assessed signals from the US Federal Reserve and awaited key US inflation data later in the day. Spot silver fell 2.3% to $52.71 an ounce by 0618 GMT, according to Reuters. Spot gold slid 1.1% to $4,024.22 an ounce, with US gold futures for December delivery down 0.4% to $4,035.90. Platinum dropped 1.8% to $1,511.02 and palladium slid 0.5% to $1,006.03, leaving silver as the sharpest faller among the major precious metals.

Silver leads precious metals lower

The Federal Reserve held interest rates steady on Wednesday in the 3.75% to 4.00% range, as expected, in a split 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favour of an immediate quarter-point rise. Chair Kevin Warsh left December open without committing either way, and traders are now pricing in about an 83% chance of a rate rise in December, according to the CME's FedWatch tool cited by Reuters. Higher interest rates increase the opportunity cost of holding non-yielding bullion, reducing its appeal, and the stronger dollar and elevated Treasury yields weighed further on metals.

A hawkish hold keeps December in play

Attention now turns to the Personal Consumption Expenditures price index, the Fed's preferred inflation gauge, due on Thursday, alongside the first estimate of third-quarter US GDP. A stronger-than-expected reading could reinforce expectations of further tightening and extend the decline in metals, while a softer print could ease it. Gold is on track for its second straight monthly fall despite continued geopolitical uncertainty in the Middle East, which would normally support demand for safe-haven assets.

Inflation data is the next test

Sources: Reuters via Maaal, Economies.com.