Gold and Crypto Fall as Hot US Inflation Rattles Markets

US producer price data released on Thursday, September 10, showed a 0.4% month‑over‑month rise and a 5.4% year‑over‑year increase, slightly above expectations. The stronger‑than‑expected inflation reading lifted expectations for a Federal Reserve rate hike in September and sent Treasury yields higher.

Impact on Safe‑Haven Assets

Higher yields made cash‑equivalent assets more attractive, weighing on traditional inflation hedges. Spot gold (XAU/USD) slipped more than 1%, falling toward $4,350 after briefly trading above $4,400. Bitcoin also declined, mirroring the broader risk‑off sentiment.

Bond Market Reaction

The 10‑year Treasury yield rose above 4.9%, its highest level since October 2023, while the 30‑year yield reached roughly 5.35%. The CME FedWatch tool indicated a rise in the probability of a September rate hike to about 70%, up from roughly 62% earlier in the day.

Underlying Inflation Details

The Bureau of Labor Statistics reported that final‑demand goods prices increased 1.1% and services rose 0.1% month‑over‑month, with energy accounting for more than three‑quarters of the goods increase. This composition suggested an energy‑driven shock rather than a broad‑based inflation surge.

Outlook

Market participants will watch the upcoming US Consumer Price Index (CPI) release for further clues on inflation trends and Fed policy. A repeat of hot inflation data could sustain pressure on gold, Bitcoin and risk assets as investors reassess the role of traditional inflation hedges.